Intellectual Property 101: Intangible Assets
Every year, thieves steal more than $300 billion from U.S. companies. But these thieves don't have to worry about security systems or armed guards. And they don't need a getaway vehicle, because the things they are stealing are invisible. Sound like a sci-fi movie? The problem is more real than you might think.
For businesses and academic institutions, intellectual property is a big deal, but it also applies to the rest of us. Don't be intimidated—although it sounds complex, you don't need an advanced degree to understand this important topic.
The Basics of IP
First things first: Intellectual property is loosely defined as "creations of the mind." Intellectual property includes (but is not limited to):
- Correspondence, print or electronic.
- Photographs and photographic archives, print or digital.
- Diaries, notebooks, journals and personal papers.
- Literary and artistic works.
- Symbols, images or designs.
- Manufacturing processes.
These assets are intangible, but they can still be legally passed down and protected.
If you are an artist or a writer or a successful business owner, your intellectual property may be among the most valuable assets in your estate. The best way to protect yourself is to register or formally protect your intellectual property through a patent, trademark or copyright.
4 Ways to Protect IP
1) Patents protect inventions.
2) Trademarks protect names, slogans, logos and symbols.
3) Copyrights protect writings, music, paintings, movies, choreography and architecture.
4) Trade secrets are protected information companies use to gain advantage over competitors.
Watch Your Back
Even if you haven't created the next great technology gadget or written a song that hit the Billboard charts, you can still take steps to protect your intellectual property. The aforementioned tools are your best defense during your lifetime. But a sound estate plan that includes your intangible assets will ensure the things you worked so hard to create during your life will be protected even when you're gone.
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When you create an estate plan, be sure to include all of your assets, even those you can't see or touch. If you own a business, this may include any logos or trademarks you've created as part of your business. Talk to your estate planning attorney to ensure the language used in your will or living trust includes tangible and intangible personal property.
Just like your other assets, you can make gifts of intellectual property to charitable organizations like ours. For more information on these or other long-term gifts, please contact Paula S. Fortunas at 850-431-5752 or firstname.lastname@example.org.
3 Celebrity IP Cases That Made Headlines
1. Before he died in 2004, Ray Charles gave each of his seven children a lump sum of cash under the condition they waive all intellectual property rights to his songs. But a few years later, the kids went after the copyrights for more than 50 songs, leading the sole beneficiary of Ray's estate, the Ray Charles Foundation, to sue. The foundation owns all rights to Ray's IP, including his songs, and uses royalties from the songs to support youth programs and research on hearing impairment.
2. Even before Steve Jobs died in 2011, businesses were trying to make a buck on his likeness. After his death, an Asian toy company immediately began promoting a Steve Jobs doll, complete with black turtleneck and gold-rimmed glasses. Apple sued, claiming Steve's likeness was part of the company's intellectual property. They won, and the miniature homage to Apple's founder was pulled from the market.
3. During his lifetime, Franz Kafka burned 90 percent of his work. When he died, he left explicit directions to a friend to burn, unread, all remaining diaries, notebooks and manuscripts. The friend ignored Franz's directive and instead signed a deal to publish the manuscripts. The papers have since been passed down through several estates, and the rights to the few remaining works are still being negotiated.
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The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.