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The division of intellectual property in a divorce

Splitting up assets while splitting up your marriage is a common source of stress and contention. It takes time gathering financial records, valuating each item or entity and deciding what to do with it. The process entails following state laws on community and separate property.

As if Washington legislation on property division is not complex enough as is, it gets even more complicated when you factor in intangible goods such as intellectual property. What happens to this in a divorce?

Definition of intellectual property

First, it is important to understand what falls under this category. Intellectual property can include the following:

  • Copyrights
  • Patents
  • Software
  • Trademarks
  • Trade secrets

They usually relate to business, but do not always have to.

Challenges of IP division

These assets can be difficult to identify, track and valuate. You must check if the intellectual property is currently valid; verify its ownership; and look at transactions, milestones and market conditions to arrive at an accurate estimate of worth and application of the law. You also have to consider what role each of you played in asset development and access. It can be challenging to prove these points due to the complex nature of the property.

Possible solutions

Depending on your circumstances, you may be able to secure IP protection in the form of a restraining order. This prevents your ex from using or selling the information. Other possibilities are a lump-sum payment and short-term royalties. You can also show that the intellectual property currently has no marketable value to qualify for a minimal monetary settlement. Anything you included in a prenuptial or postnuptial agreement may also play a role if in accordance with the law.

The bottom line is that IP is tricky to manage in a divorce. It is best to set up protections long before this moment comes, but once it is already here, it is not too late to find a viable option with the help of legal and financial professionals.

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