Intellectual Property Issues in Divorce

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Copyrights, Trademarks and Patents in a Divorce

In certain divorce cases, there are important issues regarding intellectual property. Broadly speaking, intellectual property is the set of legal rights to an expressed idea – it is property that results from the fruits of mental labor. Its common forms are copyrights, patents, and trademarks. If the idea was expressed, created or memorialized during marriage, it is the community property of both husband and wife. In a divorce, there are many questions which must be answered if a spouse has a patent, copyright or trademark. How much is it worth? What if the idea was developed prior to marriage but completed during marriage? What if the project is not finished at the time of divorce? What if the copyright involves film or production rights? Who is entitled to the royalties if there is a sequel? Can the creator spouse maintain control over the property and pay the other spouse if, as, and when the royalties are actually received? Can the royalties be divided disproportionately?

Generally, an owner of a patent, copyright or trademark has two options at divorce. He or she can hire appraisers to value the property. On the one hand, this can be expensive and speculative. On the other hand, if the rights are subject to valuation, such an option can allow for final division of property without future entanglements with the ex-spouse. Another option is to negotiate a division of income or royalty from the intellectual property on a go forward basis. Such a division can be complicated in achieving concurrence since the spouse who manages the property and who is responsible for enhancement of the property value should receive compensation for his or her post divorce labor. This approach also requires agreement on the proportion going to each spouse which can be contentious.

Both options have pitfalls and advantages depending upon the property so it is important to consider the unique attributes of each case. Most importantly, it is crucial for both parties to stay creative and flexible to insure that the value of the patent, copyright or trademark is maximized.

For additional information please download Intellectual Property Issues in Divorce, a paper co-authored by Lea C. Noelke and Andrea (Andi) St. Leger.