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Inheriting Digital Assets

Adam S. Bernick, Esq. on 4/3/2013

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Article Image Attorneys who write wills and trusts as part of their practice have frequently been requested to write detailed clauses disposing of various forms of property, from tangible personal property, such as jewelry, to intangible personal property, such as trademarks, copyrights and patents, and real property. Within the last decade, a fourth category has come into being- digital property. Problematically the law governing the disposition of digital property is out of date.

For example, who has the right to passwords and user names, and can these be given or bequeathed or otherwise devised via a will or trust? Do domain names constitute intellectual property? What about content of material posted on social media, such as photographs posted on a Facebook page of someone who is now deceased? In addressing these questions two fundamental documents affect the answers to these questions: the terms of service of agreements between the now deceased individual and the company providing the service, such as Comcast®, Google®, Yahoo®, etc…, and the 1986 Stored Communications Act, ("SCA", codified at 18 U.S.C. Chapter 121 §§ 2701-2712).

The SCA, in essence, prohibits consumer electronic-communications companies, such as AOL® or Google®, from disclosing the content of an individual´s account and communications and postings therein without the owner’s consent or a government order such as a warrant. 18 U.S.C.A. § 2703. While the statute predates popular use of the Internet or the more recent advent of social media, it remains in effect.

The Internet Service Providers ("ISP") such as Comcast® or Verizon®, Internet Services such as Yahoo® and Google® ("IS"), social media companies such as Facebook® (collectively "Internet Companies") have voluntary Terms of Service Agreements ("ToS") between the company and individual or entity that creates an account with the Internet Company. By way of illustration, Facebook´s® ToS specifically states that "[Y]ou [the account holder] will not share your password (or in the case of developers, your secret key), let anyone else access your account, or do anything else that might jeopardize the security of your account." Facebook®, Statement of Rights and Responsibilities, Section 4, 8. Likewise, the account cannot be transferred without permission of Facebook®. Similarly, Yahoo´s® ToS specifically states that "[N]o Right of Survivorship and Non-Transferability. You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted." Yahoo® Terms of Service Agreement, Paragraph 28. While Yahoo® "may" allow the account to transfer and data to be accessed if there is a specifically worded clause in a will, there is no guarantee this will occur. Internet Companies, especially social media companies such as Facebook, have resisted such efforts, going so far as to seek court orders to deny access to protect the privacy of the deceased account holder. Therefore, whether Internet Companies need allow access to the content of a deceased user´s account is up to the company providing the service absent a state law to the contrary, which in any event could be considered in conflict of the SCA prohibiting such access absent a warrant.

While some Internet Companies may permit the memorialization of someone´s account, so that they have a presence on a social media site even after they pass away, generally the account cannot be altered or otherwise accessed.

As of the date of March 1, 2013, 5 states have enacted statutes to enable fiduciaries to access online accounts: Connecticut Statutes § 45a-334a (see also Proposed Bill 5227 introduced January 11, 2013, status); Idaho Statutes §-15-3-715(28); Oklahoma Statutes § 58-269; Rhode Island General Laws Chapter 33-27; Indiana Code § 29-1-13-1.1. Whether the Internet Companies will respect these statutes or whether the courts will uphold them in light of the SCA remains to be seen as no cases have reached the US Supreme Court regarding executors accessing such content.

Pennsylvania had proposed legislation to amend Title 20 (Decedents, Estates and Fiduciaries) of the Pennsylvania Consolidated Statutes, in administration and personal representatives, providing for power over decedent account on social networking website, microblogging or short message service website or e-mail service website, under PA HB 2580 in the 2012 session of the Legislature, but the statute has not been so amended, and new legislation will need to be introduced in 2013.
Individuals may be tempted to consider the executor of the estate or heirs as third party beneficiaries to the digital information, but many ToS frequently specifically waive this. Moreover, due to the SCA, even if you were to leave a list of your passwords to various sites, arguably only the person who registered for the account could use such passwords and it would be an arguable breach of the SCA for an heir or executor to do so after the account holder died.

Based on the above, then, even if one writes a will and specifically grants the executor authority over social media accounts, email, etc…the Internet Companies may not allow access to such accounts of a deceased individual or to the contents thereof. Moreover, once the Internet Companies are aware that the individual is deceased, they will begin closing such accounts generally.

By contrast, if one executes a Power of Attorney or is under a guardianship, it may be possible to obtain such data and information because the agent/guardian is in essence acting for an individual who is currently alive. Nonetheless, agents and guardians should expect a lot of red tape in accessing this data, and may have to take legal action to secure it.

I will not discuss the intricacies of the Internet in terms of who has the right to lease or otherwise grant the right to the use of a domain name. However, it is generally recognized that if you are the registered owner of a domain name, you own the legal domain name rights to the domain name. If the domain name is a registered trademark, it may be considered intellectual property, and thus possible to bequeath; however, a critical issue is if the registration lapses because the fees to renew or extend the rights to the domain name are not timely paid, which means the domain name might be re-issued to other individuals. Likewise, if the domain name is registered in the name of a corporation, and the corporation has perpetual existence, even if a decedent is the sole owner of the corporation, it would be possible to renew the registration with only the payment of the registration fee.

A separate issue is whether forms of digital property that are not owned in any fashion, but used by the deceased individual. By way of illustration, an individual does not generally own any of the items purchased on Apple´s Itunes® or Amazon´s Kindle® application because the purchaser generally purchases the license to use the digital files, not the actual song or book in a digital form. Also, generally the license is "non-transferrable". While the files in the account may not be considered an asset that can be used by others, the account itself may be considered an asset. It may be possible to create a trust while you are alive to own the license for benefit of your heirs. While this in itself raises a variety of issues, such as who would serve as a trustee and would the digital licensor recognize or continue to recognize such rights, it is an option to consider.

Digital assets could be lent or sold to third parties if the licensor of the product permits such transfers by the retail store that has the right to resell the right to use the licensed product. Presumably, there would be a variety of threshold questions to address, primarily compensation to the publisher of the material, compensation to the licensor, eliminating access by the initial purchaser. By way of illustration, were Apple to permit sale of a music collection purchased on its iTune® store by customer A to Customer B, the transaction would have to proceed through the iTune® store. Unlike purchase of a book or cd from a retail store, which could then be sold or left to heirs via a will, even if internet companies such as Apple permit transfer of the right to use a licensed product, freely transferring the rights to license to the product or leaving it to heirs may not be contemplated, or even if eventually granted would likely still involve fees for the transfer. While there may be an eventual arraignment addressing these issues, with licenses eventually being transferable via the retail store that sold customer A the right use the initial licensed product, this is not generally currently the case.

Consequently, individuals should be aware that when they create their wills, their executor may not have any authority to retrieve data, including photographs posted to social media websites. While such clauses may be added to their wills, the Internet Companies could still decline access to the data. Likewise their books on Kindle® or collection of music on iTunes® may vanish when they die, instead of being able to be transferred to heirs. Clients should be advised to save all such photographs and data that they want passed to heirs to a hard drive that can be backed up, or print out the data in question, to the extent that there is no license infringement in doing so. If Internet providers or companies allow multiple account holders´ consideration should be made to setting up accounts to add heirs so that they can access the data.

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