Did you know patents and copyrights can be transferred to heirs and trusts? The past month I received calls from two individuals – one had lost a husband in a tragic accident after only five year of marriage and has a three-month-old-child. The other was one of the sons of widowed parent who passed away after a long illness. Both decedents were inventors and had applied for and received patents. The first decedent had transferred patent ownership to his Revocable Trust as shown by the detailed trust declaration. The other decedent had not told his children about his patent; they found the patent certificate in a desk drawer. The widowed decedent’s other assets were not probate assets because they were disposed of through his designated transfer on death beneficiaries on file with his financial advisor. He did not own real property. Neither patent expires until well into the next decade.
The decedent husband had been in the process of seeking a licensee for his invention as the Trustee of his Revocable Trust at the time of his death. His spouse was named as the Successor Trustee by the Trust document.
The widowed decedent’s children hope to find a licensee for their father’s invention or perhaps sell the rights to the invention. They will need to open a probate proceeding to effectuate the proper transfer of the patent rights to them and have referred to a probate attorney.
Questions
- Does the wife have the legal right to continue the licensing negotiations on behalf of her late spouse? Yes, because she is named as the Trust’s Successor Trustee. She should first verify that her late husband had recorded the change of ownership of the patent to the trust with the United States Patent & Trademark Office. In this case, her late husband had recorded the assignment document showing the transfer of his patent rights to his Revocable Trust clearly establishing her right to continue negotiations on behalf of the Trust. Because patent ownership resides in the Trust, the Trust will need to be specified as the Licensor in any executed licensing document and royalty payments by the licensee will be made to the Trust. If she was not named as the Trustee, then the actual designated Successor Trustee will need to act on behalf of the Trust. If the Successor Trustee (whether the wife or someone else) believes that the patent is being infringed, any patent infringement lawsuit would name the Trust as the plaintiff.
- Do the widowed decedent’s children have any patent rights? Not unless the patent rights are formally transferred to them as heirs by operation of law. Because there was no will, any transfer would be under the intestate succession laws of the state where probate proceedings are appropriate. A formal probate proceeding would need to be 19pened. Any transfer to the heirs would need to be pursuant to a court order by the probate court and this order should then be filed with the USPTO to establish the current ownership of the patent. Without a court order, the children cannot legally exploit the patent or bring any infringement lawsuit against an alleged infringer. Heirs may also replace the inventor-decedent in prosecuting a pending patent application before the USPTO with proper documentation establishing their right to do so as the inventor-decedent’s legal heirs
The foregoing is a simple analysis to demonstrate that patents and copyrights are a type of personal property that can be left to heirs/beneficiaries or trusts. However, much like the case with real property or a motor vehicle, the transfer of these intellectual property rights requires compliance with legal formalities. Also, IP licensing agreements are complex documents and any heir/beneficiary who has legal rights to a decedent’s intellectual property should strongly consider consulting with an IP attorney before signing any IP licensing agreement or for that matter any other IP-related instrument such as an IP assignment of rights agreement.
Take Home Points
- Inventors and creators should remember to dispose of their intellectual property assets via a will or trust. Such assets may serve as the decedent’s legacy and also provide financial benefits to their heirs.
- Even if intellectual property was not formally accounted for in the decedent’s estate-planning documents, legal heirs may still be able to formally secure ownership of the intellectual property via probate court proceedings.
- If you are involved in a probate proceeding and are aware that the decedent may have been the owner of intellectual property, be sure to let your probate attorney know this fact. If the intellectual property is not properly disposed of in the probate proceeding, any closed probate proceeding would generally have to reopened to properly transfer the intellectual property to the appropriate heirs/beneficiaries.
Final thoughts.
Check out the publication history behind the book “The Confederacy of Dunces” (I highly recommend this book). The persistent mother of a brilliant new author, John Kennedy Toole, succeeded in getting the book published in 1980 (eleven years after his untimely death) after securing the rights to the novel. The novel’s assignment history is available at www.copyright.gov. But for his mother’s dedication, his novel would never have been published. The New York Times referred to it as: “A Masterpiece . . .the novel astonishes with its inventiveness . . .it is nothing less than a grand comic fugue.” I’ve read the book and agree with the Times. The book takes place in New Orleans.
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THANK YOU FOR READING THIS BLOG. HOWEVER, THE FOREGOING IS NOT LEGAL ADVICE AND IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY.
Susan Dierenfeldt-Troy
