IP Heirlooms – Testamentary Assignment of Digital Contents

Posted on Sep 25, 2012

IP Heirlooms – Testamentary Assignment of Digital Contents

Recent media reports raised several questions about the transfer of so-called digital “property” by means of a testamentary bequest. These digital works include e-books, songs, videos, movies, applications and other forms of intellectual expression recorded in digital format and distributed to end-users by means of web traders such as Kalahari, Amazon and Apple iTunes.

According to these reports, individuals who sought to provide for the transfer of their personal collections of digital works after their death found that the law does not specifically provide for such transfer of ownership. Consequently some turned to trust law in an attempt to vest their future heirs with the rights to these works, while others argued that it has become necessary to include a username and password in a will so that the new owner may use the digital works after the testator’s death. In North America several states have implemented legislative measures for the transfer of so-called “digital property” by means of a testamentary assignment while an enterprising legal practitioner jumped on the opportunity to sell his own software for this purpose.

In fact, those who are attempting to make hay while the sun shines are likely to end up with nothing more than chaff. The truth is simply that in the case of digital content there can be no talk of digital property of any sort.

When a user “buys” an e-book or song from one of these online service providers, a contract of sale is not concluded. In reality the user only receives a right to use the work for specified purposes such as to download and open the e-book, play the song or install the application. For this reason the agreement between the service provider and the customer is defined as a license agreement. Therefore it is a mistake to imply that the user has vested any property rights over downloaded contents. A license agreement neither transfers ownership of the contents nor does it create any transferrable rights for the user.

In the case of content provided by Amazon and Apple, the standard terms of the agreement specifically state that the contents is not sold to the user. Furthermore, these agreements are described as non-exclusive, non-transferrable license agreements for the limited use of the work. Therefore such an agreement is appropriately classified as a contract for the provision of services as opposed to a contract for goods.

As a result, all service providers (including Kalahari, Amazon and Apple) expressly prohibit the transfer (by any means) of the rights conferred on the user in relation to the work, despite the fact that such a provision is unnecessary. Consequently, a collection of digital content cannot be bequeathed to another because it is neither personal property nor any kind of transferrable right. Of course the same prohibition would apply where any attempt is made to transfer digital content to a trust. Regardless of whichever circuitous route is followed to achieve the transfer of the rights to digital content (posthumously or otherwise), it would still amount to a breach of contract. And in most cases a breach of the license agreement would activate the service provider’s right to recall the user’s rights to use the work and his/her copy of the work itself. Any attempt to retain possession of the work would then constitute an infringement of copyright in the work.

Furthermore, the standard license agreement most commonly used for the provision of digital content is expressly concluded with the user in his or her personal capacity. Hence the term: end-user. In addition, these agreements impose an obligation on the user to keep his or her access credentials safe and prohibits the use of a username or password by anyone other than the licensee. Consequently, any mention of a username or password in a will (or anywhere else) would also constitute a breach of contract while the use of another person’s authentication credentials to gain access to protected work is a form of fraud and a criminal offense in terms of the Electronic Communications and Transactions Act.

Finally, the rights of the end-user (outlined above) must be distinguished from the rights of the author or copyright owner of the works in question. In the latter case, the intellectual property rights (a specific kind of movable property) may of course be transferred to another by means of a written contract or testamentary disposition in terms of the Copyright, Trade Marks or Patents Act, whichever the case may be.

As for the rights of the end-user – lest you want to turn your heirs into criminals, these must be carried to the grave.


Cobus Jooste



One Comment

  1. This raises an interesting question of “what one is getting for the money paid”, when buying a physical book vs, say, a e-book version of the same text, and the different licenses that each has.

    The price differentials are quite often sufficiently close to bring into question the essence of the value proposition. I am not aware of the details of the fully loaded cost of a digital vs a printed book, but the pricing model is based on comparing the printed book to the digital one. However, your post above points out that I get far more with a printed book – I get the right to transfer my copy of the IP to whomsoever I please, and that that right follows the IP until physical destruction – what we know of as the second hand book market.

    There is more than a whiff of greed in the licensing model that charges prices that are implicitly related to the life-long transferability, but severely restrict that transfer, even by the same owner, say to an upgraded/ replaced device.

    I realize that piracy is rampant, and is wrong, but I think we need a re-negotiation of the social contract involved in order to find an equitable balance between creators, publishing channels, and consumers. Steve Jobs took a lot of flak for his 99c per tune model on iTunes, but, by-and-large, the market found it fair, and it is working – many people pay rather than pirate. We need to find something like this for other forms of media.