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How to determine intellectual property after divorce

Roughly 50% of all first and second marriages in the United States end in divorce. That leaves countless couples dealing with child custody and splitting up assets. While most people have a basic idea about how that process works, one less understood area is intellectual property rights.

What happens to intellectual property rights in a divorce? With this asset holding a high potential for revenue over time, it only makes sense that each former partner would want to retain some rights to it. Determining who retains control of this property is a different process than a car or house. Here’s everything you need to know. 

Intangible Assets

Tangible assets are easier to divide. These can include anything from furniture to electronics and dishware. Intellectual property, however, is an intangible asset. It’s not something physical that can be divided. Forms of this property include:

  • Patents
  • Trademarks
  • Copyrights
  • Trade Secrets
  • Trade Dress

Courts consider intellectual property part of the couple’s estate. Tangible items in the estate are divided via equitable distribution. Equitable does not mean equal, however. It just means that assets are split up in a way the court deems fair. 

Intangible assets are often divided in the same manner. With intellectual property, things get a little trickier when you consider any future income the property might generate. 

Present and Future

While present property values fall under equitable distribution, future income in forms like royalties or licensing fees may not follow suit. Some courts have upheld that a spouse is entitled to future income from intellectual property even though it is impossible to determine what income may be generated. 

In other cases, that large unknown variable was deemed too speculative to consider. It all comes down to the judges decision, like any court ruling. Access to future funds can also depend on what part a spouse had to play in the creation of the intellectual property.

If both spouses worked together on a book, then it would need to be divided fairly based on levels on contribution. If one spouse wrote a book while the other supported them, then the supportive partner may retain some rights to the property. If one spouse had nothing to do with the creation of the book, then they may not find equitable distribution from its future income. 

What to do After a Ruling

If you feel as though you do retain some rights to intellectual property in a divorce but the judge rules otherwise, you have the right to appeal. You’ll need an experienced lawyer, like family law attorney Debra Schoenberg, who is familiar with the division of properties in divorce cases. 

You’ll need to prove to the court why you should hold any rights to the intellectual property, its potential for future income, and justify any aid you gave in the creation of that property. While this is a challenging process, it can pay off in the long run.