Saturday, July 15, 2017
An estate's most valuable assets may not be based in foreign real estate investments or found in the forgotten safe hidden in the basement. Intellectual property has the potential to be an estate's longest-producing and most lucrative asset if it is gifted appropriately. Intellectual property includes patents, trademarks, copyrights, and trade secrets.
If intellectual property is included in an estate, it is important for counsel to perform an inventory that determines the scope of the intellectual property assets. It is also extremely important to make sure that the putative owner holds the sole rights to property being left behind. It is common for a decedent to hold a joint patent for some invention or creative work. Capitalizing on an invention without the consent of co-inventors or co-creators might stir up serious legal trouble.
While there is a considerable amount of effort required to ensure that intellectual property is valid and owned solely by the decedent, completing this step does not mark an end to a beneficiary's work. To preserve the value of intellectual property that is part of an estate, beneficiaries must continue to diligently protect the asset. For patents, beneficiaries are required to pay regular maintenance and renewal fees. If these fees are not paid, the patent rights lapse and the patent will no longer be enforceable. With trademarks, if the mark is not used for three consecutive years a court will consider it abandoned.
Finally, estate plans that bequest intellectual property should consider the desire of the testator. A famous example, Franz Kafka demanded in a final writing that any of his left-behind works were to be burned unread. Another, J.D. Salinger left strict instructions dictating that none of his works were to be made into movies. Any estate planner handling a gift of intellectual property must ensure the inclusion of proper procedures for the continued maintenance of the property.
See Denise S. Rahne & Shira T. Shapiro, Practical Considerations for Valuing Intellectual Property Assets in Estate Planning, Probate and Property Magazine, July 2017.