When it comes to estate planning, most people focus on tangible assets like real estate, vehicles, money, and personal belongings. However, in today's increasingly digital world, intellectual property (IP) is becoming an essential aspect of your estate plan. Although some people think that this wouldn’t apply to them, this is far from the case. Just because you aren’t Walt Disney or JK Rowling doesn’t mean that you don’t have valuable intellectual property that you should include in your estate plan. Did you invent something? Do you have a secret recipe? Have you recorded an album or sold your paintings? If so, then you do have IP that you should protect.
From patents and trademarks to copyrights and trade secrets, protecting your IP assets should be a crucial consideration when creating your Will. In this blog post, I’ll provide valuable tips for safeguarding your intellectual property as part of your estate plan, ensuring its continued protection and benefiting your heirs in the future.
Tip 1: Take Inventory of Your Intellectual Property
Begin by taking stock of all your intellectual property assets. This includes patents, trademarks, copyrights, trade secrets, and any other intangible assets you own. Review relevant documents and records to ensure that you have a clear understanding of the nature, value, and scope of each asset. This inventory will be vital for determining how you want your IP assets to be managed and distributed after your passing.
Tip 2: Consult an Intellectual Property Attorney
To ensure that your intellectual property is adequately protected, consult with an experienced intellectual property attorney. They will guide you through the complexities of IP law and provide invaluable advice regarding the best strategies for safeguarding your assets. They can also assist in drafting legally sound provisions for your Will, addressing issues like ownership transfer, licensing rights, and management of your IP portfolio.
Tip 3: Consider Licensing Agreements
Licensing agreements can play a vital role in protecting your intellectual property and generating income for your beneficiaries. Explore the possibility of licensing your IP to trusted individuals or organizations during your lifetime or after your death These agreements can outline the terms and conditions under which your IP can be used, ensuring its proper utilization while generating revenue for your heirs.
Tip 4: Establish a Succession Plan
Creating a clear succession plan is crucial for the seamless transfer of your intellectual property rights. Identify potential successors within your family, business partners, or trusted individuals who can carry forward your IP assets responsibly. It is essential to consider their knowledge, experience, and ability to manage and protect your IP portfolio effectively. Clearly outline their roles and responsibilities in your Will, ensuring a smooth transition and safeguarding the integrity of your intellectual property.
Tip 5: Protect Trade Secrets
Trade secrets often form the core of a company's competitive advantage. It is essential to take appropriate steps to safeguard these valuable assets, especially if they are part of a family business. Include provisions in your estate plan that explicitly address the protection of trade secrets. This can include non-disclosure agreements (NDAs) for key employees, limiting access to sensitive information, and designating specific individuals responsible for the management and maintenance of trade secrets.
Tip 6: Provide Clear Instructions
When drafting your Will, provide clear and specific instructions regarding the management, licensing, and distribution of your intellectual property. This ensures that your intentions are understood and executed according to your wishes. Be explicit about the ownership of each IP asset, including any restrictions or permissions you want to place on their use. Consider appointing a trusted executor or IP attorney to oversee the execution of your intellectual property provisions.
Tip 7: Consider Domicile in Rights of Publicity
Don’t overlook the valuable rights to someone’s image and likeness. This is often known as the “right of publicity” and it is now protected in just about every jurisdiction. However, it matters a lot where you reside. To take advantage of the law of a specific state, you need to have actually lived there. For example, California has a strong right of publicity, but Princess Diana could not take advantage of this because she wasn’t domiciled in the state. The United Kingdom doesn’t recognize a right of publicity as something you can inherit. This essentially means that anyone can profit from her image.
Tip 8: Regularly Review and Update the Will
As your intellectual property portfolio evolves over time, it is crucial to review and update your estate plan periodically. New creations, acquisitions, or sales of IP assets should be reflected in your Will to ensure accuracy and relevance. Stay in touch with your intellectual property attorney to stay up-to-date on any changes in IP laws that may impact your estate plan.
Tip 9: Research Merchandising Rights
You might be able to pass on your merchandising rights even if you aren’t a big celebrity. Let’s say you were part of a popular 1990’s boy band who had two big hit songs. Nostalgia is often a powerful marketing thing, and popular songs from yesteryear can find new life when featured in movies and TV series. If you think you might have merchandise rights, you’ll need to review the circumstances of your brush with fame. You can only pass on those rights if you retained rights to the band or persona that you were associated with. This might require literally getting the band back together to ascertain what exists.
Tip 10: Understand Copyright Terms
In the United States, copyrights are protected in the U.S. Constitution. The Copyright Act protects copyrights in everything from books and music to paintings, sculptures, architecture, and even computer software. Copyright protection generally lasts for the author’s life plus 70 years after the person’s life. That only applies to works created on or after January 1, 1978. For works created before 1978, things get complicated and it’s best to consult an attorney. You may transfer copyrighted works by Will or assign them to a trust.
The Copyright Act gives authors a limited time to terminate copyright transfers - which allows an author (or musician or architect, etc) to reclaim rights that they transferred under old licenses. The benefit of the termination rights is that an author can receive a better market value for rights they licensed many years ago. The termination right is passed to statutory heirs upon the author’s death. This right cannot be transferred through a trust or by a Will. This is something you will need to think through carefully if this applies to you.
Draft Your Will with IP Rights in Mind
Protecting your intellectual property in your estate plan is crucial to preserving your legacy and ensuring that your assets are utilized according to your wishes. By taking inventory of your IP assets, seeking legal counsel, considering licensing, and following our other tips, you’ll be certain that your wishes are honored.
