Dividing Intellectual Property in a Divorce

intellectual property, division of property, divorceDividing intellectual property in a divorce. A common (and difficult) part of divorce involves dividing the community property between divorcing spouses. Such community property may often include bank accounts, family homes, vehicles, investment accounts, business interests, and the like. The assets you and your divorcing spouse share may also include various types of intellectual property. How will a court handle these assets during a divorce?

What Types of Intellectual Property May Be Community Property?

In California, any asset acquired during the course of marriage is presumed to be community property (e.g., property owned by both spouses). This presumption includes intellectual property acquired by either spouse.

Intellectual property includes any patents, trademarks, or copyrights created by either spouse. For example, you or your spouse may have patented an invention, penned a book, written a song, created a website, or sold goods with a unique brand. These all may be considered intellectual property. Note that some types of intellectual property–like patents–involve an application and examination process, but other types of intellectual property rights vest merely when you or your spouse create the work. If these intellectual properties are created during the course of marriage, they may be considered community property and will be part of the assets divided during a divorce.

What to Do with Intellectual Property Assets Upon Divorce

Couples generally have two options to consider when dealing with intellectual property assets during a divorce.

  • Determine a value of the intellectual property – One option is to determine the value of the intellectual property and divide that value between divorcing spouses. In such a scenario, one spouse may buy out the other spouse’s interest in the property, either by a cash payment or an exchange of other property worth the same value. This option poses some short term costs, however, because it generally requires an appraisal of the value of the intellectual property. Hiring an appraiser is not cheap, and determining the actual value of some intellectual property may be challenging, especially when that property has yet to produce any income.

  • Determine a future royalty rate – Another option is for divorcing spouses to agree to a royalty rate for any future return on the value of the intellectual property. For example, divorcing spouses may agree to each receive fifty percent of any income generated by the intellectual property. Such an arrangement will often take into account the fact that one of the divorcing spouses will have the responsibility of managing and monetizing the intellectual property asset. Accordingly, the managing spouse may receive a higher royalty rate.

Getting Division of Property Legal Help in Sonoma County, Mendocino County and Lake County California

If you are facing a divorce and are interested in learning more about how your marriage assets will be divided between you and your divorcing spouse, Beck Law P.C. can help you. The family law attorneys at Beck Law P.C. can answer you questions and help you determine the best method of obtaining a divorce given your unique circumstances. For a free consultation regarding mediation or divorce, contact Beck Law P.C. at 707-576-7175 or visit us online.

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