Articles

Intellectual Property Law -Copyright Law

COPYRIGHT BASICS

Connie J, Mableson, Esq.●602-277-8100 ●www.mablesonlaw.com

1. WHAT IS COPYRIGHT? Copyright is a form of protection provided by the laws of the United States to the authors of “original works of authorship,” including literary, dramatic, musical, and artistic works. Copyright law is the primary basis for protecting the original *expression * of literary and artistic works that are fixed in a tangible form that can be perceived by others. The work must contain a minimum degree of originality.

2. WHAT FORMS OF PROTECTION DOES IT PROVIDE? The owner has the exclusive right (the only and sole right) to:

► Reproduce the work in copies or phonorecords (make copies)

► Prepare derivative works based upon the work (make related works)

► Distribute the work

► Perform the work

► Display the work (as in a film)

3. WHEN DOES COPYRIGHT PROTECTION BEGIN? Copyright protection begins from the time the work is created in fixed form capable of being perceived by others. The copyright in the work of authorship immediately becomes the property of the author who created the work. Publication, mailing back to yourself, or registering the copyright is not necessary to create copyright protection.

4. WHEN DOES COPYRIGHT PROTECTION END? A work that is created (fixed in tangible form for the first time) is automatically protected from the moment of its creation and is ordinarily given a term enduring for the author’s life plus an additional 70 years after the author’s death. In the case of “a joint work prepared by two or more authors who did not work for hire,” the term lasts for 70 years after the last surviving author’s death. When the copyright terms ends, the work falls into the “public domain” and anyone can use it for any purpose without permission from the author.

5. WHAT IS NOT PROTECTED BY COPYRIGHT LAW? Several categories of material are generally not eligible for federal copyright protection. These include among others: titles, names, short phrases, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, lettering, or coloring; mere listings of ingredients or contents; ideas, procedures, methods, systems, processes, concepts, principles, discoveries, or devices, as distinguished from a description, explanation, or illustration; facts.

6. WHO OWNS THE COPYRIGHT? The copyright in the work of authorship immediately becomes the property of the author who created the work. Only the author or those deriving their rights through the author can rightfully claim copyright. The authors of a joint work are co-owners of the copyright in the work, unless there is an agreement to the contrary. Each co-owns the whole work if the intent of each is to make his/her contribution to the whole and not stand alone. Each has the right to sell, license or otherwise dispose of the work as long as the other receives 50% of any proceeds. Exceptions:

► Employment. A work prepared by an employee within the scope of his or her employment.

► Work Made for Hire. A work specially ordered or commissioned for use as: Commissioned at the request of someone and created under a written agreement.

► Transfer by Written Contract. If the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

7. ADVANTAGES TO REGISTERING THE COPYRIGHT. Even though registration is not a requirement for creation or protection of a copyright, the copyright law provides several inducements or advantages to encourage copyright owners to make registration. Go to www.copyright.gov to register your copyright online.Among these advantages are the following:

► Registration establishes a public record of the copyright claim.

► Before an infringement suit may be filed in court, registration is necessary

► If made before or within 5 years of publication, registration will establish prima facie evidence in court of the validity of the copyright and of the facts stated in the certificate.

► If registration is made within 3 months after publication of the work or prior to an infringement of the work, statutory damages and attorney’s fees will be available to the copyright owner in court actions. Otherwise, only an award of actual damages and profits is available to the copyright owner.

8. FAIR USE. ANY USE OF COPYRIGHTED MATERIAL NOT IN THE PUBLIC DOMAIN REQUIRES PERMISSION OF THE OWNER OR ITS AGENT UNLESS FAIR USE LAWS APPLY.

Some uses already determined to be of fair use are use for criticism, comment, news reporting, teaching, scholarship or research. Fair use is determined on a case by case basis.

Fair Use Factors:

► Purpose and character of use. The degree to which the challenged use has transformed the original and the purpose and character of use including whether such use is of a commercial nature or is for nonprofit educational purposes.

► The nature of the copyrighted work. Fair use is more difficult to establish when the work being used is at “the core of intended copyright protection.

► The amount and substantiality of the Portion used in relation to the copyrighted work as a whole.

► The effect of the use upon the potential market for or value of the copyrighted work.

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Digital Assets in Estates

Rex M. Anderson & Connie J. Mableson

Digital Estate Planning Steps in a Nutshell -Give us a call and we will send you our 6 Steps in Digital Estate Planning that may be incorporated into the attorneys’ traditional estate planning process to provide a roadmap for the personal representative or trustee during administration of an estate or trust. 602-277-8100.

Estate and Probate practitioners routinely advise clients on how to protect and devise assets in the most beneficial ways relative to the client’s needs and circumstances. Attorneys routinely represent the decedent’s personal representative and/or trustee regarding the administration of an estate or trust.

Traditional Estates.

In a traditional estate, after the death of a person, the personal representative or trustee is responsible to inventory the estate, gain control over, secure and preserve the assets, and eventually turn over the assets to the heirs, devisees or beneficiaries. For instance, in a simple, traditional estate, the personal representative will be concerned with typical assets such as the house, automobile, bank accounts, investment accounts, vacation home, and personal property. The PR will perform such tasks as finding the keys to the house, changing the locks to secure the house if necessary, inventorying the contents, sorting through files and desk drawers, gathering bills and statements, etc. Estate attorneys know how to advise clients in these tasks.

Digital Estates – a new procedure.

Today, however, with the advent of Digital Assets, a new procedure for handling these assets must be created. Because of the intangible nature of Digital Assets and the ever growing complexity of our client’s “digital footprint”, developing comprehensive plans, requires having a good understanding of the world of Digital Assets. A few definitions may be helpful.

“Digital Assets” in this context means (i) intangible or tangible items that are stored digitally on “Hard Goods” and such assets include information, financial records, rights to income, passwords, bank accounts, personal memorabilia, and contractual and intellectual property rights (such as copyrighted works); and (ii) assets that only exist in a digital form (and only stored digitally on Hard Goods) and are, by their very nature, intangible. They may have value in the digital worlds or environments in which they exist and that value may be converted to or exchanged for real cash currency (USD).

“Hard Goods” are the physical devices or equipment that digitally store or contain the client’s or decedent’s Digital Assets. The client or decedent either owns the Hard Goods or “leases” the Hard Goods or equipment as digital storage space from a third party storage company, or on someone else’s equipment, network or platform (such as on the “Cloud”). Some assets that are stored digitally such as photos or important papers that have been uploaded by the client or decedent to a photo-sharing/storage website (such as FLICKR) may also have an associated tangible copy (such as a photograph stored in a photo album).

“Cloud” for purposes of this analysis means a network of hardware or Hard Goods and related software owned, managed and maintained by a third party and for which access to the hardware resources (for storage) and related software programs is granted to the user/client upon payment of a subscription fee.

Emergence of a New Standard of Due Diligence

A new standard of due diligence for personal representatives and trustees is in the process of being formulated as these new Digital Assets gain greater recognition and appreciation by clients and their attorneys. Many attorneys believe that Digital Assets in estates are a concern for the future and it is premature to worry about the issue now. Many attorneys believe that they will not be practicing when the legal issues surrounding Digital Estates become important. And, many attorneys believe that their client base of older people will have no need for advice about Digital Assets. These beliefs are outdated. Practitioners who do not advise their clients about Digital Assets from estate planning to probate will do their clients a disservice and may face malpractice actions for such failure.

For many, our primary means of communication is email, often through multiple email accounts. We “tweet” about the latest happenings through our Twitter accounts. We keep in touch with friends and colleagues through social networking sites such as Facebook and LinkedIn. Facebook is now the leading platform for social and business activities and transactions. It is estimated that in 2011 at least 375,000 people in the U.S. with a Facebook account will die.

Types of Digital Assets

Email Accounts

Many people have multiple email accounts. Some are personal and some relate to their businesses. Stored emails may be a valuable source of information and the attachments to emails may also contain valuable information. Emails may contain passwords that are key to unlocking access to other email accounts and online or web accounts. Many bills are sent via email without a corresponding hard copy. Many email providers offering free email accounts will delete email accounts after a period of inactivity. An email address book may contain valuable email addresses for various vendors or business contacts.

Financial Information and Accounts

Many people use Quicken similar programs to keep track of their financial affairs. Tax returns may be prepared using programs such as Turbo Tax and these software programs may contain valuable financial information. Banks and brokerage firms now offer internet accounts that can be used to check balances, pay bills and transfer assets between funds.

Online Bills

Bank of America now only sends it mortgage payments via the internet. Many other lenders are switching from paper statements to “paperless” statements. If the personal representative does not have access to the online bill paying account, it is impossible without a lot of work to get bills paid on time.

Online Businesses

A surprising number of people operate an online business. They may be operated from a web page storefront, through Ebay, Amazon or other internet sales channels. These accounts need attention by the personal representative, especially if sales of items are ongoing and need to be fulfilled by the personal representative. If the sales are being posted to an online account system such as PayPal, the access to the PayPal account is vital to securing the assets of the estate. And, many times the personal representative will automatically cancel all credit card accounts. If a credit card of the decedent is tied to a PayPal account, then PayPal cannot credit the decedent’s account with monies generated by the decedent from online sales.

Web Pages and Blogs

The content on personal web pages and blogs may have tremendous value to the family of the decedent. Many of these blogs may generate advertising revenue on their pages. The web pages themselves and the related URL (the web address of the pages) may have a commercial value that someone may be interested in purchasing.

Social Networking Accounts

Sites such as Twitter, Facebook, and LinkedIn allow individuals to communicate with each other and post information. In a recent survey of U.S. adults who use social networking accounts, 28% of them use the accounts to promote themselves or their work, 28% use them to make new business contacts and 89% use them to stay in touch with friends. The decedent may have a social network account which is actually a license to use the platform. Pursuant to the contractual terms of the license agreed to by the user of these social networks, the license is non-assignable and is automatically revoked upon the death of the user. Consequently, without the password and user name, access to the accounts after the death of the decedent may be impossible without dealing with the network which is difficult, laborious and subject to the terms of the network’s policies.

Registered Domain Names

Many people have registered domain names but are not using those domain names. This means they are holding the domain names for investment or future use. Access to the registrars of the domain names may be essential to transfer those names to beneficiaries or to heirs or to third parties to whom those names have been sold by the personal representative. Although the vast majority of domain names may have little value, a personal representative probably has a duty to investigate the value of any registered domain names owned by the decedent and attempt to sell any domain names, which may have value.

Intellectual Property

There can be significant value in IP rights related to musical, dramatic, textual computer code or other creative expression. Many times the actual works are stored digital or take digital formats (such as MP3 files that play music). The personal representative must inventory not only any of the copyrights but the related creative works and ascertains the value and proceeds accordingly.

Video Games and Virtual Worlds

It is not uncommon for millions of people to participate in online virtual games and virtual worlds. Second Life is a virtual environment in which the in-world currency of Linden dollars can be converted to real cash money (USD). Most recently, a virtual space station (exists only in a virtual world that can only be accessed with a computer) sold for over $600,000 USD. World of Warcraft accounts can sell from anywhere between $100-$5,000 or more per character (although technically selling accounts or characters violates the Terms of Use of the game provider). Suffice to say that there may be extremely valuable virtual assets that the personal representative will want access to virtual accounts in order to determine the value of and the right to sell these assets.

Conclusion

Digital Assets are here to stay. Estate and Probate practitioners must incorporate Digital Estate planning into their practices in order to better serve clients and in order to ensure that all digital due diligence has been properly performed as a part of their law practice management.