Estate Planning for Intellectual Property: Protecting Copyrights, Patents, and Trademarks

Your money, real estate, and financial accounts are not the only assets that belong in a comprehensive estate plan. If you are a writer, artist, inventor, or business owner, proper estate planning for intellectual property is critical to ensuring your hard work continues to generate value for your loved ones. You do not need to be a famous author or painter to own copyrights, patents, trademarks, or royalties that require specific legal protection after you pass away.

Intellectual property generally includes creations and inventions that may be legally protected by copyrights, patents, trademarks, or other rights. Examples include written works, photographs, artwork, music, software, inventions, brand names, logos, and online content. These assets may have significant economic and personal value and require thoughtful planning to ensure that they are properly managed, protected, and transferred.

Take Steps to Protect Your Intellectual Property

Different steps are necessary to legally protect different types of intellectual property. Here are some of the most common types:

• Copyright protects “original works of authorship” such as books, movies, songs, computer software, photographs, and architectural works. Works do not need to be published to be protected, but publication generally increases commercial value. Copyright exists the moment you create an original work. However, to enforce your copyright in an infringement lawsuit, you must register it with the US Copyright Office. You should also display the copyright symbol (©) to provide public notice. Copyrights generally last 70 years after the creator’s death, though works made for hire or owned by a business are subject to a different rule.
• Patents are available to anyone who invents or discovers “any new and useful process, machine, manufacture, or composition of matter” or improves upon an existing one. Different patent types exist for different inventions. To be eligible, your invention must not have been publicly disclosed before you file. Before applying, conduct a comprehensive patent search. An attorney or agent can help with the search and prepare your application for filing with the United States Patent and Trademark Office (USPTO), ensuring that your patent provides sufficient protection. Once granted, a utility or plant patent lasts 20 years from the filing date, while a design patent lasts 15 years from the grant date. Utility patents also require periodic maintenance fees; design patents do not.
• Trademarks are typically brand names and logos that identify and distinguish the goods and services of one source from those of others. Simply using your mark gives you limited legal protection under common law, but only in the geographic area in which you use the mark. State registration extends that protection statewide. For national protection, register your trademark with the USPTO. Before filing, perform a thorough trademark search to confirm that your desired mark—or anything confusingly similar—is not already in use. Use the ^TM symbol for unregistered marks and the ® symbol once your mark is federally registered, both of which serve as public notice of your claim. A federal trademark has an initial 10-year term and can be renewed indefinitely in additional 10-year increments for a fee. To keep it valid, you must continue using the mark in commerce and actively defend it against infringement.

Include Your Intellectual Property in Your Estate Planning

Including intellectual property in your estate plan can help preserve its value and ensure that the associated rights and income are managed according to your wishes. Before creating or updating your plan, provide your estate planning attorney with a complete inventory of your intellectual property, along with any related registrations, applications, agreements, assignments, licenses, royalty statements, and ownership records.

Copyrights

Of the three types of intellectual property, copyrights require the most careful estate planning, largely because of a unique legal rule that can unravel your intentions if you are not aware of it.

If you own a copyright, you should specifically address both the title of the original work (i.e., the book, painting, etc.) and the details of your copyright in your will or trust. If your copyright is not specifically mentioned in your will or trust, it will instead pass through a catch-all (residuary) provision covering property you did not address elsewhere. This outcome can create problems because the physical work—the book, the painting, the master recording—and the copyright in that work are legally separate property interests. Without specific instructions, one person could inherit the physical item while someone else inherits the copyright. In addition, depending on how valuable the copyright is, the heirs who inherit it could have a heavier tax burden.

Copyright law also gives creators a right to terminate most transfers or licenses of copyright in their works after a set number of years. After the creator’s death, this termination right passes to a surviving spouse and children. Importantly, this right cannot be waived or signed away in advance, even by contract. Transfers made by will are generally excluded from these statutory termination provisions; however, this does not necessarily mean that a will is always preferable to a trust for transferring copyrights. The appropriate method depends on the nature of the rights, when and how they were transferred, probate considerations, and the creator’s long-term goals. Estate planning and intellectual property counsel should coordinate to determine the best approach.

Patents

Unlike copyrights, patents carry no termination right, so they can be freely transferred by a will or to a trust for the benefit of your loved ones. Transferring ownership to a trust can help avoid the cost, delay, and public exposure of probate. When including patents in your estate plan, ensure that your documents clearly identify the following:

• the owner of the patent
• the patent number
• those who have the right to license the patent
• the parties responsible for paying the fees required to maintain the patent

In addition, documentation evidencing the transfer to the new owner should be recorded with the USPTO.

Trademarks

Like a patent, a federally registered trademark may be transferred through a will or trust. A trust may offer advantages, such as continuity of management and probate avoidance, but the appropriate method depends on the owner’s circumstances and goals. Because a trademark generally must be transferred together with the goodwill associated with the business or goods and services it represents, the estate plan should address both the mark and the related business interests.

The executor, trustee, or beneficiary who receives the trademark should record the change in ownership with the USPTO and maintain documentation establishing the chain of title. The new owner must also continue using the mark in commerce, monitor and address unauthorized uses when appropriate, submit required maintenance and renewal filings, and pay applicable fees. Failure to properly use, maintain, or protect the trademark may weaken the owner’s rights or result in loss of the registration.

Royalties

Intellectual property that has been transferred or licensed to another party often generates royalties or other income. Depending on how your estate is structured, those payments could flow directly to your heirs or be directed to a living trust or a trust established at your death. When you pass away, any publishers or other agencies should be notified to direct the payments to the trust or to the loved ones who have inherited the right to receive those royalties. It may also help to name an executor or trustee with expertise in managing intellectual property and the royalties it generates.

Contact Us

Estate planning for intellectual property can be complicated. Not only can we help you with this in your estate plan, but we can refer you to intellectual property attorneys too to make sure your lifetime protections are in place. Let's make sure that the products of your creativity are properly protected and passed on to your family and loved ones in the way you intend. Contact us to achieve your estate planning goals for your intellectual property.