The phrase “intellectual property” probably sounds familiar to you, but you are not alone if you don’t fully understand its meaning. Intellectual property is better understood when we break it down into its sub-components of copyrights, patents, and trademarks. These three categories of intellectual property commonly include symbols, logos, music, literature, art, and inventions. When someone holds a trademark, patent, or copyright they have exclusive control over their creation and the ability to exclude others from using it.

A trademark is a brand name, word, logo or symbol that allows for distinct identification of a business, product or service. The image of an apple that appears on every Apple, Inc. computer, watch, or iPad, identifies these items as products of the Apple Corporation. If anyone were to use the Apple, Inc. logo without permission, Apple could (and has in the past) sue for trademark infringement. Trademark exclusivity lasts for ten years and can be renewed indefinitely.

A copyright is a legal right given to the creator of an original work to control the distribution and use of their creation. This typically covers written, musical and artistic mediums. If a copyright has been registered then the holder has exclusive dominion over their creation for their lifetime plus 70 years. The duration of a copyright past the lifetime of its creator has obvious estate planning implications which should be discussed with an estate attorney.

A patent grants a monopoly over a newly created item or a significant improvement on an existing item. Patents are also available when a new plant is created, but patents are not available for anything that already occurs naturally. For example, if I were to create a new type of combustion engine that runs on water, I would want to apply for a patent. This would prevent others from manufacturing or selling my invention without my permission. Depending on the type of item and patent granted, a patent holder can expect to maintain exclusive control between 14 and 20 years.

Now that we have a basic understanding of intellectual property, we can explore the impact of disability and death. Assume that I have been granted a patent for my new hydro-combustion engine. With the abundance of water on our planet, my invention would be very valuable since it would cost mere pennies to power. Let’s say I have entered into negotiations with a large automobile company for the purchase of my engine (essentially purchasing the patent) for $500 million dollars. If I suddenly become incapacitated, who has the authority to continue with the negotiations on my behalf? If I haven’t taken any estate planning steps, a conservator will have to be established in court. This scenario would likely involve an ongoing review by the commissioner of accounts and could be quite expensive. Alternatively I could have a general durable power of attorney that grants an agent authority over my intellectual property. My agent could then continue the contract negotiations without involving the court and all its formalities. The most efficient manner of dealing with incapacity would be to coordinate my patent with my revocable living trust. The US Patent and Trademark Office (USPTO) will accept assignments of patents to a revocable trust so long as the assignment is notarized, identifies the patent by number and date, and has been recorded with the USPTO. With my patent assigned to my trust, my backup trustee can continue the contract negotiations without any court involvement.

If I were to die during the contract negotiations then there are two main routes to distribute my assets to my heirs. If the patent was titled in my name alone, then a probate estate will likely be initiated with the clerk of the circuit court. All of the unpleasantries associated with probate will then fall on my executor to distribute my estate assets to my beneficiaries. If I had assigned my patent to my trust before my death, then my death trustee could conduct business on my behalf outside the purview of the probate court and commissioner of accounts. Patents must have been properly assigned and recorded to the trust prior to death.

Inventors, artists, musicians, authors or anyone else creating new and innovative intellectual property should all consider the impact of their disability and death on their creations. This is particularly important in the realms of art and music where the value can dramatically increase after the death of the creator. The law firm of Johnson, Gasink & Baxter, LLP has worked with numerous clients over the years to protect and preserve their intellectual property assets. If you have further questions please contact my office and make an appointment.

Related Posts
  • Estate Planning for Military Service Members, Veterans, and their Families Read More
  • Should I Get a Trust? Comparing Trusts v. Wills in Virginia Read More
  • The CORPORATE TRANSPARENCY ACT (CTA) What you should know at a glance Read More