The division of property in divorce can have enormous impact on each spouse’s future portfolio of assets and therefore, on his or her individual standard of living as the marriage is left behind. For an equitable division of property to take place, an accurate inventory of assets and proper assignment of values are especially important when assets include intellectual property like copyrights, trademarks, patents and trade secrets.
The nature of intellectual property
Intellectual property is considered intangible property, meaning property less concrete than an object, account, house or piece of real estate. Things classified as intellectual property could include a formula, brand, song, design, invention, website, marketing strategy, piece of writing, computer program, software and similar items. Ownership or the right to use intellectual property is generally exclusive.
Intellectual property in divorce
Here are examples of situations involving intellectual property that should be considered in divorce:
- Ownership rights of a spouse as an inventor or creator
- Ownership or assignment of or licenses for intellectual property like software, branding, design, software and more owned by a business that a spouse owns or in which he or she has an ownership interest, like a business owner, stockholder or partner
- Rights to ownership or royalties from original creative works like art, music, plays, film, writing and more
- Trade secrets held by businesses in which a spouse has interest
- And more
Inventory of intellectual property
A family lawyer will investigate the existence of intellectual property in a divorce, sometimes needing to bring in financial or other experts to assist.
It is important to carefully inventory intellectual property in divorce because it has value and the potential to bring income or profits to the owner, someone assigned the right to use it or someone who licenses the right to use it. Because by its nature it is intangible, care must be taken in divorce to account for all intellectual property of both spouses, challenging because it can be hard to discern its very existence, or because a spouse may be less than forthcoming about his or her intellectual property interests.
Some intellectual property information, however, is publicly available and can be checked like patent filings with the U.S. Patent and trademark Office.
Assignment of value to intellectual property
Once identified, it can be challenging to place proper fair market value on intellectual property, but this is a crucial step to keep the property division fair. Again, experts may need to be consulted in the valuation process.
Utah property division
Utah property division in divorce uses the concept of equitable division, which rests on fairness. Often a divorcing couple will divide its property by agreement reached through negotiation, usually facilitated by their attorneys. If no agreement is reached, the Utah court hearing the divorce has wide discretion to equitably divide their property.
Whether the parties or the judge make final decisions about property division, when intellectual property is involved, no division can be fair and equitable if a full inventory has not been done and an informed fair market value assigned to all intellectual property.