The Inheritance of Intellectual Property
Intellectual property rights and other intangible assets should usually be specifically addressed in a will. We provide the following as a number of considerations to keep in mind when deciding how to deal with your intellectual property rights.
Maintaining a Vision
Many inventors and owners of intellectual property rights have plans for the use of those rights. These may be plans which are in the process of being implemented or plans which have not yet been acted upon. Particularly where your ideas are unpublished, unregistered, or unproven, the value of your ideas may not be apparent to an heir.
If you have a vision for how you would like to see your intellectual property rights used, estate planning is often a great way to ensure that those rights will be passed on to someone who shares your vision. A great deal of work goes into proving unproven ideas, and great deal of work goes into exploiting proven ideas. Where rights are passed on to someone who has no interest in continuing a vision, the full potential of intellectual property is likely to remain unrealized.
Arranging for the passing of intellectual property rights to an interested beneficiary need not leave other beneficiaries uncared for. As any good estate planner will tell you, Canadian rules around estates planning are quite flexible and you are likely to be able to divide your assets in the way in which they will be most appreciated.
If you have an existing will but are now working on a new invention or creative work or other idea, it may also be advisable to amend your will or otherwise make known your intentions in relation to the new idea.
Keeping Key Rights Together
Many a book is written as part of a set of related books exploring a creative world and many a patent is obtained as part of a family of related patents covering a larger inventive scheme. Relationships can also exist between different types of intellectual property rights; for example, often a trademark is associated with products that are also protected by a patent.
If you wish to enable someone to continue your vision, they may need to have control of all related rights. Control of all related rights may be necessary to allow your heir to control how your creative and inventive works are further developed, or simply to enable your heir to have the ability to continue to develop your works at all. Since many intellectual property rights are exclusive in nature, in the sense that they allow the owner to keep others from using the rights, related rights are often most valuable when kept together.
Leaving your heirs to sort out ownership of key rights may result in difficult and contentious negotiations and could keep your heirs from continuing your vision. In some cases, as discussed further below, disputes may cause delays in the payment of maintenance fees or the taking of other steps, which may result in rights being lost entirely.
Providing for Dependents
Where the value of your intellectual property is likely to comprise a large part of your estate, you may wish to obtain a formal valuation and an opinion on whether government regulations may impose limits on who you can give your rights to.
Some jurisdictions have requirements regarding caring for dependents or others, often assessed as a percentage of the value of the total estate. Such obligations if present may limit who you are able to give your rights or may require creative relocation of value schemes to ensure that your will is enforceable.
Providing for the Maintenance of Rights
Some intellectual property rights are contingent upon taking ongoing steps. For example, in most jurisdictions the owner of a patent must pay periodic maintenance fees to maintain their patent rights. Trademark registrations may also need to be renewed to keep the benefits of the registrations. Where payment or renewal deadlines are missed, rights may be temporarily or permanently lost.
More generally, many business agreements and arrangements involving intellectual property are based on an understanding which may not be intuitively apparent. For example, patent licenses may have been granted to settle disputes, and trademark rights may have been sought in anticipation of future growth. Providing an heir with proper documentation may go a long way to allowing an heir to realize the potential of your intellectual property rights. If you are working on something, such as an invention or creative work, it may be worthwhile to make a note of your planned next steps for commercialization.
While unique to creative works, the moral rights of a creator can be very important in maintaining or creating a legacy. Moral rights are separate from economic rights in Canada and exist for the length of the copyright term.
Moral rights allow an author to limit some uses of their work, even after assigning ownership of the work to someone else. Since moral rights last for the full length of the copyright term, which extends past the death of an author, the heirs of an author may enforce moral rights on behalf of a deceased author in some circumstances. Preparing for the protection of moral rights can be a particularly important part of estate planning.
Specificity and planning is often key in ensuring that the transfer of your intellectual property goes as seamlessly as possible. Wills and other testamentary instruments, including transfers during your lifetime, may provide you with greater control over how your intellectual property rights are used in the years to come.