Oftentimes when we think of estate planning, we readily think of the most efficient ways to deal with our real estate, insurance policies, cash and investments, and even our motor vehicles. We rarely think of how to organise our affairs so that children, spouses and other beneficiaries get the full benefit of our intellectual property and related contract rights after our death. This topic should be of particular importance to persons who work or run businesses in the creative industries, including songwriters, record producers, inventors, authors, book and music publishers, magazine and tabloid editors/publishers, graphic artists, cartoonists, musicians, and even sportsmen and sports-women.

As you already know, there are several categories of intellectual property. There are trade marks, copyright, industrial design rights, trade secrets, patents and ‘image rights’. This article will focus on copyright.

Recently, I heard Shabba Ranks mention in an interview that he intends to leave a legacy of his work for the benefit of his children. As such, he does not intend to sell or give away his work for undervalued prices. As a business man and a family man, Shabba Ranks’ intentions are to be lauded.

The Copyright Act expressly states that ‘copyright’ is property. It is property that can be owned, transferred, licensed and it can be passed on to beneficiaries when you die. The copyright in all forms of work subsists for at least 50 years. In the case of sound recordings, films, broadcasts and cable programmes, the copyright lasts for 50 years from the end of the year when the work was made; and in the case of sound recordings and films, if the work is made available to the public before the end of that period, the 50 years duration starts to run from the end of the year when the work was actually made available to the public. In the case of literary work, dramatic work, musical work and artistic work, the copyright lasts for 50 years from the end of the year when the author dies. Copyright in typographical arrangements of published works lasts for 25 years from the end of the year in which the edition was published.

The effect of the specified duration for copyright is that it is one kind of property that often survives the death of the creator, even when it is fully exploited by the owner during his lifetime. Additionally, as history shows, the value of many forms of intellectual property (for example, in music, art work and books) often increases exponentially on the death of the creator. The creative genius himself may not be able to fully benefit financially from his creations, but if his affairs are managed properly, he would have created a worthwhile legacy for his offspring and dependents. However, it is not prudent to wait until death and/or when the increase in valuation of the intellectual property becomes evident before putting in place proper legal arrangements. By that time, it may be too late and the integrity of the ownership of the copyright may be compromised or is unclear, quite unnecessarily.

You may be familiar with the allegations and legal battles that have surrounded ownership of the musical and literary works of Bob Marley. On September 13, 2010, the U.S. District Court of New York held that Bob Marley’s estate does not own the rights to five (5) of Bob Marley’s most popular albums, namely: “Catch a Fire”, “Burnin”, “Natty Dread”, “Rastaman Vibrations” and “Exodus”. The court held that these works belong to United Music Group (“UMG”). UMG acquired the rights from Island Records, the entity for which Bob Marley had done the recordings in 1973 and 1977. This case underscores the importance of a copyright owner ensuring that contracts involving his copyright are fair and provide an accurate reflection of the scope of the rights that he/she intended to transfer. It is of paramount importance for copyright owners to enter into written contracts in order to properly protect their interests. Informal arrangements can prove to be a loss leader in the long run, and sometimes almost immediately. Agreements should reflect long-term planning and not just short-term gains. Additionally, appropriate documentation could save the estate a lot of money in legal fees and litigation-related expenses.

Estate planning for copyright owners involves some considerations which are very similar to those considered when dealing with other forms of property. The copyright owner may transfer the copyright and/or streams of income from commercial arrangements involving his copyright (royalty) to his intended beneficiaries while he is alive (inter vivos transfer), or he may prepare a will, or do both as a means of dealing with different considerations that may be relevant to organising his estate. The copyright owner may also set up a trust arrangement and vest the copyright and/or royalty in a trustee for the benefit of his beneficiaries. Additionally, he may also consider managing his copyright through companies and/or other corporate vehicles which have the characteristic of perpetual succession (that is, the companies never die) and the shareholders from time to time may benefit from the value of the copyright and/or royalty vested in the company. Appropriate and specific agreements may need to accompany inter vivos transfers, including transfers to beneficiaries, trustees and companies, to ensure that the needs and specific wishes of the original copyright owner are taken care of during his life.

Estate planning for copyright owners is not one size fits all. Obtaining appropriate legal advice tailored to suit your needs and circumstances could help you to create a lasting legacy.

Andrea Scarlett-Lozer is an Associate at Myers, Fletcher & Gordon and is a member of the firm’s Commercial and Intellectual Property Departments. Andrea may be contacted via andrea.scarlett@mfg.com.jm or www.myersfletcher.com.