This article delves into the world of intellectual property rights and how these fit into areas such as estate planning, wealth transfer and arguments about such topics.
The way that people who are in the public eye, such as entertainers and sports figures, can trademark themselves and set a “brand” is an important issue for the wealth industry professionals who advise them. Beyond that, one can argue that at base, all property rights are “intellectual” because property is bound up with the creation of wealth, which requires thinking as much as brute labor.
Grasping the details of how intellectual property works and forms a part of estate planning, asset transfer and potential litigation is important, and is still a rapidly changing area. (Of course, wealth management firms themselves spend resources and time on building their own brands, as well as patenting processes, and guard them closely.)
To discuss such issues is Matthew Erskine, of Erskine & Erskine, a venerable law firm specializing in areas such as estate planning, tax, family law and other matters. The editors of this news service are pleased to share these insights and welcome responses. The usual editorial disclaimers apply. To enter the conversation, email email@example.com and firstname.lastname@example.org
The artist, formally known as Prince, is associated with creativity and the excellence of his music and performances. Now his name is associated with excess taxes and chaotic management of his estate. Prince died in 2017 without a will or even a list of his assets. Now the IRS is challenging the $82 million valuation of his estate, which includes the rights to his music and his recordings, claiming a value of $163 million, and asking for an additional $38.7 million in taxes, thank you very much. The estate is cash strapped, with two of the heirs actually selling their rights to Primary Wave, a music publisher (1). Who knows how or where they are going to get the money required to pay the additional taxes, plus penalties and interest?
Although Prince is an extreme example of not doing any estate planning, ignoring the decedent’s ownership of copyrights, patents, and other intellectual property is not uncommon. Many people think that this is only a concern of celebrities, but in this day and age, when a post to YouTube can go viral or a domain name can mean the difference between fame and obscurity, everyone has some intellectual property rights; and everyone should consider how those rights are managed during their lifetime and after their death.
Intellectual property rights are divided into two types by the World Intellectual Property Organization - industrial property rights and copyrights. Industrial property rights include patents, trademarks and service marks, designs, and locations. Copyrights are, broadly, artistic works and the reproductions, broadcasts and recordings of those works. The two types blur together, as a person can have both a copyright and a patent on the same idea. Both are the intellectual creation of one or more individuals, in contrast with the physical or electronic object that this intellectual creation embodies. Copyrights, patents, trademarks and other Intellectual property laws protects the creator(s) value in their ideas by restricting and controlling who benefits from the control and reproduction of the physical or electronic object.
Copyrights apply automatically to original works of authorship that are fixed in some medium where they can be reproduced or communicated either directly or via some device. Although automatic, copyrights can only be enforced after registration (the US Copyright Office for the US). The use of © as a copyright symbol or the words “all rights reserved” are no longer necessary to enforce a copyright. Once registered, copyrights are good for the lifetime of the author, plus 70 years (or the lifetime of the last surviving co-creators plus 70 years). Copyrights on works made for hire or published anonymously last for a term of 95 years from publication, or 120 years from creation.
Copyrights, as the right to control and reproduce something, are separate from the physical object itself. An artist or an author can sell a piece of art or a writer can gift a manuscript to another but retain the copyrights. Creators have, in the past, sold copyrights to others at a small fraction of the true value of the IP asset. Since 1976, the creator has the right to terminate the transfer of the copyright but that transfer must occur within 40 years of the transfer, or 35 years after the first publication. Because this right of termination is not transferrable except by a specific reference to the right in the creator’s will, if a creator dies before the termination time has expired, the right of termination goes to the creator’s intestate heirs, and not according to their will or trust.
Industry IP is regulated under different rules, that of patents, trademarks, service marks and designs. Unlike copyrights, they are not automatic; you lose the right to the IP if you make and sell an object before filing for a patent, or if you wait so long that someone else files before you. Also, industry IP needs to be maintained, documents filed and fees paid to establish and maintain those rights.