How Are Patents, Copyrights, and Royalties Divided?
California laws dictate that any property acquired throughout a couple’s marriage is subject to equal division between the pair upon divorce. While many people are privy to the tangible assets these rules apply to, fewer are aware of the intangible items that may also be divided amongst a divorcing couple.
Intellectual property is one of many intangible assets that may be subject to an even split during property division. This could include copyrights, patents, and royalties.
What’s at Stake
A copyright or patent gives an individual protection of their creative work. While this ownership may not be particularly advantageous at the time of divorce, the worth resides in the potential for a significant increase in value should the product take off in the future.
While the intellectual property is intangible, it provides real physical benefits. It could reap a steady stream of revenue for the owner in the coming years. Sharing this income with someone uninvolved with its creation could be devastating.
When Is Intellectual Property Deemed Community Property?
The status of your intellectual property is dependent on the timing of its creation and continued development. So, if your idea was:
- Created and protected before marriage: The copyright or patent can likely be proven to be your separate property.
- Created and protected before marriage, but increased in value after marriage: If your idea increased in value over the course of your relationship, it may be regarded as comingled property and thus be subject to an equal split between you and your spouse.
- Created before marriage but protected after: You may be able to defend the patent or copyright’s status as individual property if you prove that you were the only one to contribute to its creation and growth.
- Created and protected after marriage: The copyright or patent is likely community property.
How to Protect Your Ownership of Your Intellectual Property
Establishing a prenuptial or postnuptial agreement can give an individual a chance to protect their intellectual property. Through it, the inventor can claim their idea as theirs alone, declaring that, should they divorce, they will retain ownership of the copyright or patent and keep the revenue it may generate in the future.
Alternatively, if you didn’t create any such marital agreement, you could attempt to protect your sole ownership through mediation. Rather than allowing California courts to decide the outcome of your asset division, you and your partner could work with our mediators to come to an agreement that protects you and your idea.
You worked hard to create and produce your intellectual property. Let us work hard to protect it. Contact Alternative Divorce Solutions for assistance defending your intellectual property through a marital agreement or mediation session today.