PROTECT YOUR PROPERTY, FINANCES AND FAMILY.

Intellectual property values and the marital estate

| Oct 2, 2020 | Family Law

Divorce brings to mind splitting assets like the car or the house, but what happens when some of the marital property is intangible? Property like blueprints, logos and even slogans can all carry some intrinsic value. 

In the case of a couple involved in a business that revolves around intellectual property, can a spouse demand the division of the cost of an idea? 

Defining IP

Forbes defines intellectual property as property that derives from the work of the mind or intellect. Many ideas, inventions and creations fall under this umbrella. 

Valuing IP

Any IP that the courts consider marital property lacks a concrete price tag. There is no telling how much a logo may or may not be worth outside of an estimation — or a valuation. As Stout.com remarks, IP valuation can add millions of dollars to the marital estate. Defensible techniques and identifying all factors can take time and money to determine the fairest value. 

Dividing IP

As Texas is a community property state, all property acquired during the marriage is equally owned by both spouses. This means that any business done by one or the other may lead to creating IP that both own. There are ways to protect IP from a divorce split, but it includes taking precautions beforehand so that any IP generated by a business falls outside the normal marital property umbrella. 

Ideas cost nothing to have, but putting real work into an IP that generates income and value costs time and effort. One spouse supporting the other who makes a valuable IP is also a lot of work. Both deserve a fair piece of this difficult division. 

FindLaw Network