What happens to IP when a business is sold or someone dies

A family member opens a folder of unpublished stories. A buyer takes over a small design business. A founder leaves the company they helped build. In each case the files are easy to find, but the answer to "who may use this now?" is not. Someone has to answer the questions the original maker answered from memory. Writing that history down for them is an act of care.

Find out who owns the rights before deciding what moves

The person who made the work, the business using it and the person holding the files can be three different people. U.S. copyright law treats ownership of the copyright as separate from ownership of the object it sits in: selling or inheriting the laptop that holds a manuscript does not, by itself, pass the right to publish it. 1 Copyright can be transferred whole or in parts, so one person can own the book rights while another owns the film rights. 1

Before a sale, do this for each important right:

1. Name the legal owner: you personally, your company, a co-owner, or a client who commissioned the work.
2. Find the document that shows it: a registration, an assignment, an employment or contractor agreement.
3. Decide what the deal actually is: a sale of the company's shares (the company keeps owning its IP) or a sale of particular assets (each right has to be transferred).

"Selling the studio" is not a list of assets. Write the list, and make the sale documents match it.

Put every transfer in writing

A transfer of copyright is not valid unless it is in writing and signed by the owner or the owner's authorized agent; transfers that happen by operation of law are the exception. 1 A patent or patent application is transferred by an assignment, and the new owner then holds the same rights as the original owner. 2 Trademark assignments must also be in writing and properly executed. 3

Rights can pass on after a death

A U.S. copyright can be left by will, or it passes as personal property under the state's intestacy rules if there is no will. 1 A patent is also personal property: it can be sold, mortgaged, written into a will and passed to heirs. 2

If you are planning ahead, name your IP in your will instead of relying on a general gift of "my belongings". Write down:

• the works, patents and trademarks you own, with registration numbers;
• the licenses you have already granted and who pays you royalties;
• who inherits the income;
• who will manage permissions and renewals, if that is a different person.

Have an estate-planning attorney in your state draft the will so these rights go where you intend.

If you inherit a patent, check the maintenance-fee dates straight away. Fees are due 3½, 7½ and 11½ years after the patent was granted, the USPTO sends no reminders, and a patent expires if the fee is not paid by the end of the six-month grace period. 2

If you are the surviving spouse, child or grandchild of an author, know about termination rights. When an author granted rights in a work on or after January 1, 1978 (other than a work made for hire, and other than by will), the author's heirs can end that grant during a five-year window that starts 35 years after it was signed. 1 The notice must be served at least two and no more than ten years before the termination date, and a copy must be recorded with the Copyright Office before that date. 15

A brand is more than a transferable word

A U.S. trademark, registered or pending, is assigned together with the goodwill of the business it is used in. 3 Pending intent-to-use applications have an extra rule: until the owner files an allegation of use, the application can only be assigned to a successor of the ongoing business, or of the part of it the mark belongs to. Assign it any other way and the application is void, and any registration that results must be cancelled. 3

So do not list the brand name beside the office furniture and stop there. Hand over the products, the reputation and the customer relationships the mark stands for, and make the legal documents and the commercial handover describe the same arrangement.

Existing permissions belong in the handover

A new owner needs to know what has already been promised. List every exclusive and nonexclusive license, collaboration agreement, royalty obligation and any right pledged as security for a loan. Then read each agreement for clauses on assignment, consent and change of control: license agreements commonly name events such as non-payment, insolvency or a change of control that let a party end the license. 4

For example, a buyer expects to license a photograph freely, then discovers the seller granted someone else an exclusive license two years ago. An heir receives royalty statements without knowing which agreement they come from. A one-page list of agreements, counterparties and payment terms prevents both.

Record the transfer with the right office

Once the documents are signed, record them:

• Copyright: record the transfer with the U.S. Copyright Office, using the online Recordation System. You can record assignments, exclusive licenses, mortgages and other documents that relate to a copyright. 5 If two people claim the same copyright under conflicting transfers, the one signed first wins only if it is recorded within one month of signing (two months if signed outside the U.S.) or before the later one, and recording gives public notice only if the work is registered and the document identifies it. 1 Check the current recording fee on the Copyright Office fee page, under "Recordation of Documents". 7
• Patent: record the assignment through the USPTO's Assignment Center. An assignment not recorded within three months of its date is void against a later buyer who paid for the patent without knowing of it. 2
• Trademark: record the assignment through Assignment Center as well. 6 The same three-month rule protects you against a later purchaser. 3 Recording alone does not always update the owner shown in the trademark database; the new owner may also need to file a request to update it, or add the new owner details to its next maintenance filing. 3 The fee is listed under trademark fee code 8521 on the USPTO fee schedule, which also lists patent recording fees. 68

Recording does not prove the transfer is valid. The USPTO records documents as a ministerial act and decides what a document means only when someone acts on the application or registration. 3

Leave records that help the next person

Keep these together, in a place your executor or buyer can reach:

• ownership documents and registrations;
• current contracts and licenses;
• payment and royalty history;
• where the original files are stored, and how lawful access is arranged through your account settings and estate plan;
• the names of the lawyer, accountant or agent who knows the history.

A password does not make anyone the owner, but an archive nobody can open makes even rightful management hard. Hand over a record that shows what the next person has, what is already promised, and who to call, so they do not have to rebuild your working life from fragments.