Disclaimer: This article does not constitute legal advice. If you have any questions about your individual situation it is best to seek the advice of an experienced legal professional.
People dividing property in a divorce usually focus on money or tangible assets, but there is a third category of assets consisting of intellectual property. Intellectual property is a very common type of asset in the divorces of entrepreneurs, innovators, business owners, artists and other creative people. However intellectual property can be complicated to divide. The first step to dividing intellectual property is identifying which marital property is intellectual property.
The most common types of intellectual property are copyrights, trade secrets and patents. Each of these types of intellectual property have different consequences and will be divided differently in divorce.
Copyrights
Copyrights protect the right to authorship, royalties and copyright infringement protection over a creative work. They do not need to be registered with the USPTO, but they do have to meet specific criteria, such as being recorded in a physical medium. If someone getting a divorce holds copyrights, it first must be determined whether the copyright is marital property. This means deciding whether the work was produced during the marriage. Often with creative work, it can be difficult to trace the inception of an idea to a particular date. As well as royalties, the copyright’s proceeds may be accrued from licensing, and any damages gained from copyright infringement lawsuits. Royalties can be split in divorce, but damages can also be split too.
Trademarks
A trademark is a symbol used to identify the source of a product or service, when a company identifies themselves as the source of the product or service. Like copyrights, trademarks don’t have to be registered, but they do have to be in use. Trademarks originate when they are used to identify the source of a product or service. The trademark may be divisible in divorce, for example if it is part of the company’s “good will.” Tradmarks may also be licensed, and royalties from trademarks may be divisible. Trademarks and other intellectual property may be owned by a family business, or they may be owned by another business or entity not connected to the family, such as a music publisher.
Deciding how to divide trademarks and other intellectual property in divorce depends on who owns the IP. If the royalties were part of income during the marriage, this income may be divided, but the IP ownership itself may not qualify as marital property.
Patents
Unlike copyrights and trademarks, patents must be registered with the USPTO. If a patent is registered during the marriage, the patent will likely be defined as marital property. Sometimes pending patent applications that were starting during the marriage can mean that the intellectual property qualifies as marital property.
Simplifying Intellectual Property in Divorce
Intellectual property is a very complicated area of law, and intellectual property ownership is not always clear. Rather than engaging in a contentious and expensive court battle or hiring separate attorneys, people with complex intellectual property often choose to hire a financially qualified divorce mediator to help them divide intellectual property. People with intellectual property often choose to make a prenup or postnup to stipulate how it will be divided in divorce.
At Divorce Options San Diego, we are West Coast Divorce Mediators who conduct a thorough analysis of your shared and separate property. We identify marital property, separate property interest, conduct mediated valuations of businesses and engage our legal expertise to ensure your community property division is established in a fair, win-win mutual marital settlement that is court-ready and legal. Our mediations result in binding marital settlement agreements that can be submitted to the court with all details worked out by spouses and ready to be approved for the final divorce judgement. Our attention to detail ensures that you reach your marital settlement agreement with full transparency and confidence that all aspects of your divorce, including intellectual property, have been thoroughly evaluated with everything relevant accounted for.
If you are dealing with intellectual property in your divorce, please reach out to our financially certified, highly qualified divorce team to see how we can help with your divorce. We have offices in San Diego and Silicon Valley. We also work with clients nationally and Internationally via secure, private server. Please contact us to learn more about our high level divorce mediation services.
