When crafting an estate plan, it is important to consider all of your assets, including any intellectual property rights. Intellectual property refers to a work or invention that is the result of creativity, to which one has rights and for which one may apply for legal protection. This can include copyrights, patents, trademarks, and trade secrets.
Owning a copyright means you have control of the rights to the use and distribution of certain works of creative expression, including books, videos, motion pictures, musical compositions, and computer programs. To own a copyright, the copyright does not have to be registered with the United States Copyright Office, but if the owner wants to have the power to sue for copyright infringement, the copyright must be registered. There are potential expiration dates for copyrights, but the date will vary based on how the work was created and when it was created.
If you own a copyright, you want to be sure to include both the original work and the copyright in your will or trust. If the original work and copyright are not specifically named, it is possible for the original work and copyright to be split up such that one beneficiary owns the original work and another beneficiary owns the copyright.
Copyright law gives the author the right to terminate most transfers or licenses of the copyright at a future date. This termination right passes to the author’s surviving spouse and children when the author dies and cannot be waived or transferred to anyone else during the author’s life. If the author were to transfer the copyright to a trust, the statutory heirs could undo the author’s intent, but if the author transferred the copyright by a will, the statutory heirs could not undo the author’s intent. Although establishing a trust is preferable for many other types of property to avoid probate proceedings, a will should typically be used to transfer copyrights to the beneficiaries to avoid possible termination of the transfer by the statutory heirs.
A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something or offers a new technical solution to a problem. A patent is obtained through an application and approval process with the United States Patent and Trademark Office. Once a patent is granted, it can last anywhere from fourteen to twenty years, depending on the type of patent.
A patent can be freely transferred by a will or to a trust for the benefit of specific beneficiaries. A trust is usually the better option for a patent. It’s important to clearly identify any patents in your estate planning documents, including the owner of the patent, the patent number, those who have the right to license the patent, and the parties who are responsible for paying the fees to maintain the patent. A transfer to a new owner should also be recorded with the United States Patent and Trademark Office.
If an inventor dies before filing a patent application or during the review process, the executor may apply for the patent and be issued the patent if “proper intervention” is performed. It’s important that your executor knows what their role is in case you pass away before a patent application is filed or while an application is being reviewed.
A trademark can be any word, phrase, symbol, design, or a combination of these things that identifies your goods or services. A trademark is established when you create it and start using it, and you do have limited legal rights simply with creation and use. However, you get a much broader spectrum of rights and protections by registering your trademark with the United States Patent and Trademark Office.
A registered trademark can be transferred by a will or to a trust for the benefit of specific beneficiaries. A trust is usually the better option for a trademark. A transfer to a new owner should be recorded with the United States Patent and Trademark Office. In order to maintain the legal protection provided under trademark law, it is important that the executor, the trustee, or any individual who inherits a registered trademark continue to use the trademark and defend it against infringement. In addition, the executor, trustee, or new owner should continue to renew the trademark registration and pay the required fees.
A trade secret is information that has either actual or potential independent economic value by virtue of not being generally known, has value to others who cannot legitimately obtain the information and is subject to reasonable efforts to maintain its secrecy. Because trade secrets are designed to be kept confidential and limited to certain individuals or organizations, trade secrets are not usually included in estate plans.
Most types of intellectual property can lead to the potential for royalty payments. Depending upon the structure for the payments, these payments may still be payable after the payee has passed away. If you receive royalty payments that can continue after you die, you may be able to designate these payments to a trust. If you want to designate your royalty payments a certain way, it’s important that you leave instructions for your successor trustee or executor on how to notify any payers that the payee is changing.
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