Divorce is a difficult time. However, as challenging as it can be, many legal and financial issues must be addressed when a marriage ends. One such issue is the distribution of assets, which includes intellectual property and royalties.
Intellectual property encompasses creations of the mind, ranging from inventions and artistic works to designs and symbols used in commerce. It’s a valuable asset in the modern world, often serving as the foundation of businesses and individual success.
When a marriage ends in divorce, intellectual property division can become a complex and sensitive issue. This article will explore intellectual property and how it is handled during a divorce.
When getting a divorce in Tennessee, the courts use “equitable distribution” to divide marital property during a divorce. That means marital property will be divided fairly between spouses, but that doesn’t necessarily mean that assets will be split equally.
Courts typically categorize property as either marital or separate. Marital property includes those assets acquired during the marriage, while separate property is acquired before the marriage as an inheritance or gift. Intellectual property can be classified as marital if created during the marriage, even if only one spouse was directly involved.
To comprehend its division during divorce proceedings, it’s crucial to grasp the types of intellectual property. Some kinds of intellectual property that are commonly seen in divorce cases include:
Something can be considered intellectual property if you can patent it.
During divorce proceedings, intellectual property is considered an asset, similar to physical property or financial accounts. However, its intangible nature can complicate division, especially if one or both spouses have contributed to its creation or development.
If both spouses contributed to the creation or enhancement of intellectual property, courts may decide on a fair division based on each party’s involvement. For instance, if one spouse developed a patent during the marriage but used funds jointly earned, both parties might have rights to a portion of its value.
Some intellectual property generates income through licensing or royalties. Courts might decide on the fair distribution of such earnings between spouses mainly if the intellectual property was jointly created or significantly contributed to by both parties.
Divorce can threaten the stability of a business built upon intellectual property. Courts may consider the impact of intellectual property division on the viability of a business and issue measures to protect its continuity.
There has to be a way to value intellectual property during a divorce. There are two ways to do this: the cost approach and the market approach. After selecting the appraisal method for the intellectual property, the court can continue dividing assets.
You’ll likely have to give up other assets to keep your intellectual property. However, things can get more complicated if your spouse wants to continue to profit from the intellectual property that is considered marital property.
If you are bringing valuable intellectual property into a marriage, a pre-nuptial agreement may be beneficial. This can ensure that the intellectual property remains in your hands, regardless of what happens in the marriage. While it can be challenging to approach a pre-nuptial agreement with your partner, signing one could be the best way to protect your intellectual property and other assets.
Many believe that since the intellectual property pre-dated the marriage, it would be considered separate property and not subject to the division of assets during a divorce. However, that’s not always how it works.
Even if you had separate assets going into a marriage, they can easily become commingled during marriage. Without a pre-nuptial agreement, your spouse may be able to successfully argue that intellectual property is a marital asset if there isn’t a pre-nuptial agreement in place.
Divorce attorneys play a pivotal role in navigating the complexities of intellectual property division. Their expertise extends beyond standard divorce proceedings, delving into the intricate realm of intellectual property rights and valuations. Here’s how they can assist in such situations:
Divorce attorneys well-versed in intellectual property laws bring a specialized understanding of navigating the unique challenges intangible assets pose. Their knowledge extends to patents, copyrights, trademarks, and trade secrets, allowing them to evaluate, protect, and advocate for their clients’ rights regarding these assets.
These attorneys conduct a thorough evaluation of the intellectual property involved. They work closely with appraisers, forensic accountants, and other specialists to determine the value of patents, copyrights, or trademarks, ensuring an accurate assessment essential for a fair division.
Their primary objective is safeguarding their client’s interests related to intellectual property. Whether it involves asserting one’s rightful ownership, negotiating fair settlements, or ensuring the protection of valuable intellectual property assets, attorneys advocate for their clients throughout the legal proceedings.
Experienced divorce attorneys understand the importance of negotiation and mediation in resolving disputes. They employ strategic approaches to mediate settlements, aiming for mutually beneficial outcomes that consider the complex nature of intellectual property and its significance to both parties.
Attorneys handle the legal documentation required for the division of intellectual property. They develop comprehensive strategies based on the specifics of each case, considering factors like the creation of intellectual property, financial contributions, and the potential impact of the division on businesses built around such assets.
Divorce is already emotionally challenging, and the addition of complex intellectual property matters can escalate tensions. Attorneys provide a buffer, managing the legal intricacies and negotiations, alleviating stress, and allowing clients to focus on their personal well-being during this trying time.
Post-divorce, attorneys ensure that court orders related to the division of intellectual property are implemented correctly. They oversee the transfer of ownership or the establishment of rights outlined in the settlement to prevent future legal disputes.
The division of intellectual property in divorce involves intricate legal and financial considerations. It necessitates a nuanced approach, understanding the contributions of each spouse and the specific nature of the intellectual property in question. Seeking legal counsel and exploring collaborative solutions can mitigate conflicts and ensure a fair division that respects the interests of both parties involved.
Attorney Hunter Fowler is prepared to do what it takes to ensure you get your fair share during your divorce. He will work with you to identify what you want from the divorce settlement and negotiate with your spouse and their attorney. He will make sure that your needs are heard and met. With Attorney Hunter Fowler, you are guaranteed the best possible representation.
Contact us today for a consultation.
