CCH GUIDE TO COMPUTER LAW
Digital assets may be stored in tangible assets (such as a computer or other device, and may affect the value of those assets); and
Digital assets are usually licensed, not sold, and rights often are not transferable.
An approach Nearly everyone will write a will one day (or, if they die intestate, leave their heirs to cope with the lack of one). One way to think about how to deal with digital assets in the will is to ask these questions:
What are your digital assets?
What are they worth?
Where are they, who can access them and what passwords or other access controls (such as encryption, etc.) are required?
Who owns, hosts, controls or pays for the hardware or service storing them?
Where can copies of the licenses controlling them, including privacy policies, be located?
Are the digital assets legally transferable and if so, how can a transfer be effected?
We will focus on a few of these questions to illustrate why new thinking is required.
What about personal emails sent to the workplace, or emails concerning an employee’s “moonlighting” business. Putting aside the question of whether such mails violate the employer’s computer usage policy, those emails will sit on the employer’s computer system and be subject to a policy providing that the employer, not the decedent, owns them and may read them. It is easy to clean out an employee’s locker and return personal items—but cleaning out an “electronic locker,” i.e., e-mail files, is quite different. The personal items will be commingled with business e-mail: which items are personal, who is going to decide, who is going to conduct a review without exposing proprietary or confidential data of the employer or its customers, and how will any of this
be done at reasonable cost and without disruption? These questions should be considered by the employer and, as part of the estate planning process, the employee.
What if the digital asset is a domain name? A father may obtain the name www.SmithFamily.com or have a page at “www.onlineservice.com/Smith” where the Smiths, friends and relatives post baby pictures and news. Or the website may be devoted to the father’s business. If the father dies, what happens to that URL? Is it transferable and, if so, to whom? There is currently a legal debate regarding whether a domain name is even “property” for various purposes (e.g., can a secured creditor seize it or can it be the subject of an in rem action)—the same debate may extend to estate planning issues, and they should be addressed up front.
2. What are your digital assets worth? Most assets can have some economic or sentimental value and digital assets are no different. What if Jimmy Hendrix had received emails from Janis Joplin—those emails would have value and, unlike valued traditional paper letters saved from tons of mail discarded during life, might be commingled with thousands of valueless emails. Locating valuable assets in the future may require much the same techniques as used in electronic discovery in litigation. Other examples of “digital assets” with potential value include the family genealogy records; digital archives of music, films, photos, writings, personal journals, blogs, email, and so on.
What is the worth of the music archive if copyright-infringing, illegal copies are included in an archive sold or licensed by the estate, and what is the liability of the estate? An estate tax valuation reflecting a low value because of any infringement risk might make interesting evidence in an infringement suit. If the deceased avoided infringement under the “fair use” doctrine (which creates a defense to infringement), what happens to that defense upon death? Even if “fair use” was a defense for the deceased, executors may not qualify for it—the executor who sells or licenses the archive will make money for the estate, whereas the deceased’s “fair use” defense may have rested on the absence of commercial use. As the law in this area develops, perhaps individuals will have to provide a warranty against infringement to their estates; perhaps tracing copyright authorizations will become part of the estate planning process.
This issue is very different than the traditional sale or other transfer by estates of rare book collections or film libraries. Copies of books (and videos) have traditionally been sold, not licensed, and (under the “first sale doctrine”) one of the rights of an owner of a copy of a copyrighted work is the right to transfer the copy. The same is not true for licensed copies
of digital assets (they are licensed, not sold).
There are also new “objects” of value.
individuals are selling in online auctions, “credits” generated in online role-playing games. The credits are also bartered