From your personal life experience, you probably have a better understanding of U.S. copyright law than most people. However, understandably, you may not be fully comfortable with how U.S. copyright law intersects with trusts and estates law.
Copyright law is one category of an area of law known as “intellectual property” law, which also includes trademark and patent laws. As you may have heard throughout the years, U.S copyright law protects the exclusive rights to your work the moment that you have “fixed [your work] in a tangible medium of expression”, i.e., when you have first placed it into a tangible format. Your exclusive rights include the right to: reproduce your work, authorize derivative uses of your work, distribute copies of your work by sale, rent, lease or lending, and to perform or display your work publicly. While most of the legal definitions are the same today as they were under the U.S. copyright law decades ago, today’s digital-media age requires that you greatly expand your understanding of the scope of how you can distribute or display your work through different, ever evolving forms of technology.
Your copyright is property that is transferred through your estate plan, similar to any other form of tangible property. Indeed, through your estate plan, you are able to effectuate control over your work and its copyright for decades to come, even after you are gone. However, in order to properly formulate your plan, you need to understand and consider the difference between the physical manifestation of your work and your copyright in that work. Specifically, when you consider your estate plan, you have to keep in mind that your copyright ownership rights are separate from your ownership of the physical work itself. They are, in fact, gifted separately with the default rule being that the copyright does not pass with the gifted work, although you may have assumed that they are transferred in tandem. You should also know that this separate bequest of your copyright is not an ‘all or nothing’ endeavor. Rather, you are able to parse out your “bundle” of copyright rights in whatever way that you want by gifting such rights in part or in whole, for a specific period of time, exclusively or nonexclusively.
By way of example, the manuscript upon which you handwrote or typed your first play is different than the exclusive rights that you have in the “copyright” of your first play and the perpetuation of its authorship legacy. Thus, when you explain to your estate planning attorney that you wish to gift your physical manuscript to specific person or entity, whether through your will or trust, you must also ensure that your estate planning attorney properly understands your separate goals and intent as to how you wish to gift your independent copyright in that same play. And, since your transfer of your copyrights may be parsed out into separate pieces of a larger bundle, you must also ensure that your estate planning attorney has full information as to whether you wish to divvy up the copyrights in any particular fashion and whether you have already transferred or assigned any portion of your copyright rights to a third party. In this regard, you must ensure that your estate planning attorney and the DG©M are apprised as to whether you have entered into prior transfers or assignments of any part of your bundle of copyright rights, which may curtail the DG©M’s ability to exercise full management over your work.
If you have already transferred some or all of your copyrights, all is not lost, as you have the opportunity to remedy a transfer that has not turned out to be what you hoped it would be. In this regard, you should keep in mind that U.S. copyright laws provide you and your heirs with termination rights, which cannot be waived or contracted away. Congress provided for these termination rights in order to remedy the situation in which an author assigned his or her copyrights earlier in his or her career in exchange for unfair compensation because the value of the work had not yet been fully determined. U.S. copyright termination rights provide the author with the opportunity to eventually undo the problematic transfer and benefit from the work. Specifically, since January 1, 1978, authors – and certain family members or estate representatives upon an author’s death – have the ability to terminate any exclusive or nonexclusive transfer that the author may have made to a third party. There is a specific window of time to exercise these termination rights, namely, during the five-year period beginning 35 years from the date of the transfer. For an author, or his or her family or estate representative, to exercise such rights, he or she must serve a notice upon the holder of the copyright no more than 10 years, but no less than 2 years, prior to the date intended for the termination.
Termination rights are a net positive for authors and their families. However, at the same time, these beneficial termination rights add a level of uncertainty to your estate plan, which must be considered by you when you formulate your plan. Remember, after you are gone, your heirs have the same termination rights that you now have, so long as they are exercised within the window of time provided by U.S. copyright law. Thus, as you formulate your plan, you must consider that your heirs could potentially undo some of what you were trying to do through your estate plan, if the termination rights still exist. For example, you may wish for your copyright to be part of a trust for the benefit of the Dramatists Guild for years to come, while ensuring that the DG©M exercises management over your artistic decisions. However, after you’re gone, your heirs may decide that they wish to take away the transfer of your copyright to the Dramatists Guild and, instead, personally benefit from the copyright by exercising your unexpired termination rights. Depending upon the structure of your estate plan, your heirs could be successful in unraveling your plan for the Dramatist Guild’s benefit. Thus, you need to discuss such concerns, your wishes and your understanding of the timing of your termination rights with your estate planning attorney.
For example, estate planning attorneys may advise you that it is better for you to avoid probate and, thus, set up a trust, which is a sensible recommendation. However, the world of copyright law has not kept pace with the world of estate planning law and, at this time, a transfer to a trust does not prevent a later termination. BUT a transfer by will does. As such, if you value preventing a later termination of your bequest to the Dramatists Guild over other interests, you should make sure to emphasize this to your estate planning attorney. In fact, you can share the material from our website with your attorney.
If you want to learn more about copyright basics, the United States Copyright Office provides a helpful circular with an overview of copyright and copyright registration here.