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Protecting the future of your Intellectual Property

Protecting the future of your Intellectual Property

As an Intellectual Property (“IP”) owner you may want to consider what happens to your protected assets and associated rights after your death. This is an area which can often be overlooked, but is worth serious consideration when it comes to Wills, Trusts and Succession planning.

What is Intellectual Property?

IP is a term used to describe a set of ownership rights over creations of the mind such as music, stories, plays, recorded performances, artwork etc. While IP protection does not extend to ideas alone, these intangible assets may be protected by: patents, trademarks, copyright, design rights, database rights, or trade secrets.

The term of IP protection can differ depending on what category your creation falls under, and may be capable of indefinite renewal. In respect of copyright, in general where an author is known, copyright protection lasts 70 years from the end of the calendar year in which the author dies in the UK. Where there is more than one known owner, this period of protection begins after the death of the last artist. Therefore, depending on the IP, there are various financial benefits that may be enjoyed by those you choose to pass it on to within that timescale.

Value after death

The true extent of an IP assets value after an owner’s death is not always fully appreciated. In some cases, an owner’s creations may become even more valuable after their death. A great example of this is Vincent Van Gogh, who only sold one painting during his lifetime and is now considered one of the most famous artists to have ever lived.

Assets with IP protection have the ability to continue to generate funds and a plethora of financial opportunities long after an owner has died.  Depending on the type of IP assets these may be open to financial exploitation by continued rights to payment of royalties, the ongoing possibility of licensing opportunities, or the ability to sell on the IP assets to another person or company.

Therefore, you should take the time to discuss whether your IP assets and associated rights are capable of being bequeathed, and if so how you should go about doing this.

What steps should I take?

IP is an asset which will form part of an individual’s estate after their death and therefore it is important to consider how you wish for these to be dealt with in your Will. Without specific provisions for IP being included within your Will, it will automatically pass to the beneficiary of the residue of an individual’s estate in their Will (or fall to whoever is entitled to the residue under the rules of intestacy). There are a number of options for individuals to plan for the succession of their IP.

Firstly, a specific legacy could be incorporated into your Will which would clearly identify the IP asset and the beneficiary who is to inherit this. While this would be the most straightforward approach to ensure that the IP would not become part of the residue of your estate, a specific legacy may not be appropriate for more complex IP assets, particularly as there are different rules governing how IP can be bequeathed depending on the type of IP.

Alternatively, you could choose to appoint a “literary executor” under your Will. This would be an individual or company with experience in dealing with IP and they would be required to manage and transfer the IP assets. The literary executor would be separate from the general executor(s) and would not be involved in the administration of the remainder of the estate. The role of a literary executor would not expire upon the winding up of the estate and instead they would be able to continue to collect royalties and other income generated from the IP and arrange for this to be paid to the beneficiary in the future. This approach would ensure that your IP will be dealt with by someone who has expertise in the area.

The final option would be to set up a lifetime trust with the IP and its corresponding rights being ring-fenced as trust property, meaning it would not fall into your estate after death. This requires detailed consideration if you wished to explore this route and the suitability of this option will depend on a number of factors. 

It is worth discussing provisions regarding IP rights after death with a legal expert to ensure advice is tailored to your personal situation.

About the authors

Danielle Connell
Danielle Connell

Danielle Connell

Solicitor

Data Protection & GDPR, Intellectual Property, Trade Marks

Chris Gardiner
Chris Gardiner

Chris Gardiner

Legal Director

Wills, Trusts & Succession

For more information, contact Danielle Connell on 0131 624 6960.