How Divorce Tends To Sidestep Intellectual Property Laws

A collaborative divorce usually means that a courtroom appearance and judge are to be avoided at all costs. These are separate from uncontested divorces, but generally come with similar consequences because no one’s fighting too hard about who gets which assets (or the kids). And that makes them somewhat unique — because in both types of divorce proceedings, the assets most often overlooked are intellectual in nature.

And that’s exactly how a collaborative divorce or uncontested divorce often sidestep intellectual property laws — no one thinks to enforce them because few people realize they apply. There is too little attorney oversight in cases that occur so quickly. But IP law is still relevant, and divorcing parties should know more about what happens to their IP when they split apart.

First, you need to figure out who owns what. The question to ask is obvious: whose idea was this? But the more important information is how the law views ownership. Who patented, trademarked, or copyrighted the idea? And is that relevant? 

Beverly Hills divorce attorney Emily E. Rubenstein said, “Since our practice is in Los Angeles, we often deal with issues of intellectual property, for example music and film rights. Intellectual property assets tend to be overlooked. Sometimes parties will overlook assets which are held abroad, thinking a U.S. court does not have jurisdiction over such assets.”

But that’s not necessarily the case.

In addition to “who owns it,” you need information about the value of assets, documentation of purchase (if there was a purchase), when and where, etc. Whether or not the asset was purchased using funds in a joint bank account will also interest attorneys on both sides. They’ll want to know if that could factor into who should own it moving forward. 

Keep in mind that community assets aren’t always defined so simply. Tangibility often has nothing to do with what belongs to someone (which is why IP can be overlooked), even though everyone thinks you can only divide that which can be seen. But equity is different from equality, and divorce is about equity. That’s why one person’s divorce might result in financial assets being split down the middle, while another person’s could result in a lopsided split. 

Time and effort are included as intangible assets. Divorcing couples are legally required to disclose information related to the aforementioned IP, copyrights, patents, etc. Although the attorneys will want to look at who created or owns these intangible assets, that doesn’t necessarily mean the creator will keep 100 percent of the IP. They can be divided too.

And therein lies the problem.

According to Judy Burger, “That property’s value can be a problem. A work of art or invention may not be profitable at the time of divorce but could generate future income. Determining whether an ex-spouse receives any future profits from intellectual property is a complicated issue.”

Divorces that result in a split without the division of IP assets are often “reopened” later when one party or the other decides to sue for these future assets.

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