Intellectual Property Issues in Estate Planning and Administration
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FEATURE | TITLETRUST AND ESTATE LAW Intellectual Property Issues in Estate Planning and Administration BY LOUISA M. RITSICK This article describes intellectual property assets and intellectual property laws that a trust and estate attorney should consider as part of an estate plan or during estate administration. nown for ironic parody songs like for advertising purposes.”2 The terms of Yauch’s goals with respect to intellectual creations as well “(You Gotta’) Fight for Your Right last will and testament, while not the dispositive as the technical requirements for the transfer, (to Party!),”1 Beastie Boys co-founder factor in litigation between the Beastie Boys management, and monitoring of intellectual Adam “MCA” Yauch, who died from and the companies using Beastie Boys songs property assets. Kcancer in 2012 at age 47, fought for the right to for advertising purposes after Yauch’s death,3 The term “intellectual property” (IP) refers to control the future use of his musical creations are a dead-hand attempt to control the use of the ideas, inventions, technologies, processes, after death. Yauch’s will provided, in part, that his intellectual property from the grave. Yauch and musical, art, and literary works derived “[n]otwithstanding anything to the contrary, in handwrote the italicized words in the will pre- from the work of the mind. IP rights apply to no event may my image or name or any music pared for him by his lawyers,4 which highlights the the intellectual creation of an object as opposed or any artistic property created by me be used importance of understanding the client’s legacy to the physical object in which the intellectual 46 | COLORADO LAWYER | DECEMBER 2017 creation is embodied. Copyright, trademark, nopolies for inventing extraordinary recipes.11 Copyright and Related Works patent, and other IP laws protect IP rights by From Roman times to the Florentine republic, Copyright protection is generally offered to assigning legal rights to produce and control legal protections generally took the form of “original works of authorship fixed in any tangi- the physical manifestation of the ideas of the franchises and royal favors,12 with a goal of ble medium of expression, now known or later creator5 or other producers and providing restricting access to works already in the public developed, from which they can be perceived, an enforcement mechanism if the rights are domain rather than encouraging innovation. reproduced, or otherwise communicated, either infringed. In 1421, the Republic of Florence adopted one directly or with the aid of a machine or device.”15 IP rights may not be “assets” in the tradi- The work must be original to the author and tional sense, but IP rights may constitute a cannot be the result of copying. The owner of valuable share of the client’s estate for which a copyright has the exclusive rights to: proper planning is essential. Although Prince 1. reproduce the copyrighted work; famously fought to protect his intellectual 2. prepare derivative works based on the property during his lifetime, he died intestate, “ copyrighted work (e.g., sequels or mer- without an inventory of the music stored in his Copyright, trademark, chandising);16 vault or a plan for its release.6 Prince’s estate has 3. distribute copies of the copyrighted work been beset with claims by purported heirs and patent, and other IP to the public by sale or other transfer of disputes over the ownership of his intellectual ownership, or by rental, lease, or lending; property, with Universal rescinding a $31 million laws protect IP rights 4. perform the copyrighted work publicly; deal because it claimed that some of the rights by assigning legal and purchased from the estate conflicted with rights 5. display the copyrighted work publicly.17 held by Warner Bros. pursuant to a confidential rights to produce and Each of these rights may be separately 2014 transfer.7 retained or transferred by the copyright owner. control the physical Although copyright is automatic, vesting on What is Intellectual Property? manifestation of the creation, registration of the copyright with the The World Intellectual Property Organization U.S. Copyright Office is necessary to enforce the (WIPO)8 divides IP into two main categories: ideas of the creator exclusive rights of copyright through litigation.18 (1) industrial property such as trademarks, Since March 1, 1989, use of the copyright symbol, patents for inventions, industrial designs, and or other producers ©, in the United States has been optional.19 geographical indications; and (2) copyright and providing U.S. law required use of the © on all works first covering literary, artistic, and musical works, published before that date, and before 1989, films, and architectural design as well as the an enforcement failure to use the © generally resulted in a loss rights of performing artists, producers of record- of U.S. copyright protection. ings, and broadcasters.9 A category of intangible mechanism if the Under the 1976 Copyright Act (effective Jan- personal property,10 IP has no intrinsic value rights are infringed. uary 1, 1978), as amended, (1976 Copyright Act) when created; it is merely representative of and the Sonny Bono Copyright Term Extension value. IP laws offer creators an opportunity to Act of 1998, copyrights created after 1978 are exploit their IP in hopes of realizing a return generally good for the life of the author plus 70 on their investment of time and capital into the years.20 For a joint work, the rights endure for a creative process. Any IP asset can be subject term consisting of the life of the last surviving to both U.S. and international laws. Unless ” 21 author plus 70 years. For works made for hire otherwise noted, this article focuses on IP rights or works published anonymously or under a protected by U.S. law. of the first statutes instituting an incentive pseudonym, the copyright endures for the first mechanism that is still a feature of IP laws.13 to expire of a term of 95 years from the year of its Legal Protection of IP Rights Our current systems of copyright, patent, and first publication, or a term of 120 years from the Legal protection of IP rights has a long history. trademark laws, as well as moral rights often year of creation.22 Once the copyright protection As legal systems in different civilizations ma- protected under state law, are derived from period ends, the copyrighted materials enter tured, the legal protections offered, as well as the English system, such as Great Britain’s the public domain.23 the justifications for those legal protections, Statute of Anne (1710), which is considered Ownership of a copyright or any of the evolved. In the 7th century BCE, the Greek by many legal scholars to be the first modern exclusive rights afforded the holder of a copyright colony of Sybaris granted chefs year-long mo- copyright statute.14 is distinct from ownership of any material object, DECEMBER 2017 | COLORADO LAWYER | 47 FEATUREFEATURE || TRUSTTITLE AND ESTATE LAW such as a painting or manuscript, in which the reverts to the creator or to the successor to the the creator’s statutory heirs. The statutory heirs work is embodied.24 Transfer of ownership of creator’s termination rights. are the creator’s surviving spouse, who owns any material object does not of itself convey If the creator dies after giving the required the entire termination interest unless there are any rights in the copyrighted work embodied in notice but before the termination date, the any surviving children or grandchildren of the the object; nor, in the absence of an agreement, copyright should revert to the creator’s estate and creator, in which case the surviving spouse owns does transfer of ownership of a copyright or of pass by intestate succession or pursuant to the one-half of the interest. The surviving children any exclusive rights under a copyright convey client’s estate plan.31 However, if a creator dies of the creator, and the surviving children of any property rights in any material object. dead child of the creator, own the creator’s entire The 1976 Copyright Act not only extended termination interest unless there is a surviving the terms during which copyright protection spouse of the creator, in which case the ownership is available but also instituted other legal pro- of one-half of the creator’s interest is divided tections allowing creators or their successors among the children and grandchildren, per to terminate a copyright transfer. The copyright “ stirpes. The share of multiple heirs can only be owner may not have equal bargaining power However, if a creator exercised by the action of a majority.33 If there is or the information necessary to evaluate the no surviving spouse and there are no children or value of a copyright interest when a transfer dies before the end grandchildren, the author’s personal represen- is first contemplated. For example, based on tative or trustee owns the author’s termination the advice of her editorial team that her book of the termination interest. Because notices of termination could would probably only sell a few thousand copies, be served, at the earliest, 25 years after a 1978 Harper Lee reportedly licensed some of her window, the creator transfer, 2013 was the first year in which notices of copyright interests to the publisher of To Kill a cannot devise his termination could be filed for transfers occurring Mockingbird in 1960 for $2,500.25 When Lee and after the effective date of the 1976 Copyright Act her publisher originally negotiated the contract, termination rights termination provisions. Because the ability to no one, including Lee, predicted the immediate exercise termination rights is relatively new, success of the novel, Lee’s Pulitzer Prize, or the to a recipient of his estate planners should stay abreast of relevant Oscar-winning movie with the same title released choice and his heirs cases involving termination rights as they make in 1962.