Dividing property in a high-asset divorce can be complex. If you or your spouse own intellectual property, this process becomes even more challenging. Intellectual property is intangible, which makes it difficult to value and easy to hide. Yet, any copyrights, patents, trademarks or trade secrets one or both of you hold must be disclosed during divorce proceedings.
Dividing intellectual property
Washington is one of nine states that follows community property laws. As you and your spouse divide your assets, any intellectual property you hold will be split based on these provisions. If one or both of you protected intellectual property before your marriage, it will count as separate property under state law. Thus, it will remain untouched during divorce proceedings. Yet, one of you may have protected intellectual property during your marriage. If you did, it will qualify as community property and is subject to division.
Before dividing your intellectual property, you will need to have it valued. Once this happens, you or your spouse may decide to retain sole ownership of it. If you both opt for this arrangement, one spouse will receive an asset of equal worth in exchange for sole ownership of the intellectual property. Otherwise, you will need to work out an arrangement wherein you split the intellectual property’s value. You may also end up splitting any income or royalties it generates in the future.
Discovering intellectual property
Your spouse may have developed intellectual property for their business which they mentioned to you in the past, but they may not have disclosed it in your divorce. In this case, their business may own the intellectual property. Yet, your spouse may profit from it if a licensing agreement or sale monetized it.
Finding proof of the property can be difficult and may require researching the U.S. Patent and Trademark Office’s database. Keep in mind that the database publishes this information 18 months after its filing date. This delay could complicate your divorce if the filing is not yet public. Working with an attorney can give you access to other public records and documents which may provide evidence of the intellectual property sooner.
Dividing and discovering intellectual property may make your divorce difficult. But with know-how and professional help, you can put yourself in a position to receive a fair settlement.