When dealing with a divorce, you sometimes must divide more than just physical and financial property. You may also have intellectual property that you share.
Intellectual property may include patents, copyrights, trademarks, stories and fictional characters, or trade secrets. You must understand how a divorce can treat such assets. Otherwise, you can suffer long-reaching consequences.
Here is a broad overview of how spouses can share an intellectual property and the ways it can be divided in a divorce.
Understanding Intellectual Property in a Divorce
Intellectual property describes a range of intangible assets such as patents, copyrights, and trademarks. These are often the most valuable assets of a business, and dividing them is a complex and contentious issue during a divorce.
Dividing this property requires understanding its value. For example, a fictional character can produce a revenue stream for both spouses, but the creator will have a sentimental sense of ownership over that character.
To fairly split ownership, each spouse must make an argument for their entitlement to the IP. If one spouse offered any contribution to the property, no matter how small, they can claim at least some ownership over its value.
Fighting for Your IP in a Divorce
- Register any applicable patents or trademarks.
- Clearly document ownership, including who contributed to which parts of the IP along with dates.
- Create non-disclosure agreements, preventing sensitive information from being shared during divorce proceedings.
- Document the main creator and manager of the IP, including any information about which spouse helped the property grow.
If you and your former partner have jointly created IP, you must agree on how to divide it fairly before any legal proceedings begin. Otherwise, the courts will make this decision for you, possibly leading to an unfair, imbalanced outcome.
Storing Documents Related to Your Intellectual Property
Protecting your intellectual property is of utmost importance in today's competitive landscape, especially when you are fighting to protect it in a divorce. Utilize secure file-sharing programs and password-protecting documents, and limit access to only those who require it. Regularly back up your documents to prevent loss in case of theft or equipment malfunction.
Appraising the Value of Your IP
An appraisal can help you understand the true worth of these assets and provide a solid foundation for negotiating licenses or transfers, which may become necessary in your divorce. A valuation can serve as a helpful tool in potential litigation scenarios, as IP is often a point of contention in a divorce.
Documenting All Agreements Regarding Your IP During the Divorce
Documentation should include a clear outline of what IP is owned, what will be divided, and how it will be divided. You should have a detailed timeline of when the division will occur. You should also detail what will happen if one of the parties violates the agreement.
Explaining How Separate Property Can Become Comingled in a Marriage
Separate property includes assets acquired before the marriage, gifts, inheritances, and personal injury settlements. Marital property is anything acquired during the marriage, and both spouses own this property equally.
Comingling occurs when separate property is mixed with marital property, making it difficult to distinguish what belongs to whom. This can happen when separate funds are deposited into joint accounts, or when separate property is used for marital expenses.
An IP can become comingled when spouses work on it together. One spouse could offer a suggestion, no matter how small. If the IP creator incorporates that suggestion, then the other spouse could lay partial claim to that IP.
Untangling comingled property is complicated. Often, it involves one spouse buying the other out, profit sharing, joint ownership, or other complex legal agreements. In this situation, you definitely need an attorney to help you negotiate a fair, reasonable division of assets.
The Law Office of David A. Martin & Associates is here to help protect the ownership of your intellectual property in a divorce. For a free consultation, call us at (916) 299-3936 or contact us online.