What Is Intellectual Property?

Intellectual Property (“IP”) is generally classified as intangible personal property, meaning it’s an asset that lacks physical form but holds economic value.

The main types of IP are:

• Copyrights (protections for original works like books, music, software, art): Treated as intangible personal property under federal law.
• Patents (exclusive rights to inventions or processes): Classified as intangible personal property.
• Trademarks (protections for brands, logos, slogans): Regarded as intangible personal property.
• Trade Secrets (confidential business info like formulas, methods): Treated as intangible personal property or contract rights (enforced via agreements).

How Is IP Viewed in Marriage?

When you intertwine IP and marriage, it can create complications that many couples may not have been aware of previously. If you and your partner have not had a conversation or set up a prenuptial agreement where you explicitly state what happens to any IP, either created before or during marriage, in the event of divorce it can create animosity over who owns the IP, as well as who receives any assets the IP may generate.

Marital vs. Separate

IP developed before marriage is usually separate, but if developed during, that IP becomes marital. Even if the IP was created before marriage, an increase in value throughout the duration of the marriage may become marital property.

Valuation of the Asset

Valuing IP is complicated because it is intangible and based on future potential income. In some cases, if the IP is crucial to a spouse’s career and cannot be easily split, a court might award the asset to the creator, while retaining the non-creating spouse’s entitlement to financial interest in the work. Another method of division of IP is for the court to offset a given value of the IP by giving the spouse that is not awarded the IP more of other marital assets to balance the total value.

How A Court Would Divide in Divorce

Generally, a court will award intellectual property to the creator spouse (the spouse who created or obtained the intellectual property). Thus, the creator spouse has sole management and control over the intellectual property. However, the non-creator spouse may still be entitled to a financial interest in the work, if the work was created during the marriage. For example, if a spouse creates a new iPhone Application during the marriage, that spouse would hold the exclusive possession and control of that Application. The other spouse, however, could be entitled to a portion of the royalties and any other economic benefit earned from the Application.

How Do I Protect My Intellectual Property?

A prenuptial agreement is an effective way to protect your IP and any associated assets prior to marriage or in the event of a divorce. A well-drafted prenup can establish clear guidelines for how IP will be treated if the marriage ends. If you and your spouse have created IP during marriage, an experienced attorney can outline ownership rights or how any income associated with IP would be divided.

If you are an individual or business with intellectual property and would like advice on these assets, as well as how to protect them in the case of an upcoming marriage or potential divorce, our firm can handle these issues all under one roof. Our Intellectual Property and Domestic Relations attorneys will work hand-in-hand to ensure your IP is protected and passed along as you desire it to be.

For more information, or to seek counsel from our Family Law or Intellectual Property practice groups, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post IP & Marriage: How to Ensure Your Intellectual Property Is Protected appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Digital assets do not constitute a single collateral type under the Uniform Commercial Code (UCC), and perfection and priority depend on the manner in which the asset is held and its classification under the UCC.  As of 2026, analyzing the perfection of digital assets increasingly must take into account the 2022 UCC “emerging technologies” amendments, including the new Article 12, though adoption varies by state—for example, Ohio’s HB 195 remains pending. Consequently, a layered approach remains the most prudent strategy.

The following provides a high-level roadmap for evaluating most transactions.

Begin with Classification

Prior to considering filings or custody arrangements, address two fundamental questions:

1. Is the asset held directly (self-custody) or through an intermediary or custodian?
2. How is the asset classified—as a controllable electronic record (CER) under Article 12 in adopting states, as investment property in an Article 8 or 9 securities account framework, as a deposit account (limited to banks, and often relevant for proceeds), or as a general or payment intangible (the default category)?

This classification determines whether filing suffices or if control is necessary for robust priority.

The Baseline: UCC-1 Filing

A UCC-1 financing statement, filed in the debtor’s state of organization, remains the simplest and most cost-effective method for perfecting interests in general intangibles, particularly when classification is uncertain or control is unavailable.

Its strengths include providing public notice and establishing priority under the general “first to file or perfect” rule for various collateral types. However, it has limitations: It does not grant the lender operational authority to prevent transfers, and for certain collateral, a party with control may take priority over an earlier filer. Therefore, file promptly, but view it as foundational perfection rather than a complete solution when control is feasible.

Track A: Article 12 & Control for CER-Style Digital Assets

In jurisdictions that have adopted the 2022 amendments, Article 12 introduces controllable electronic records (CERs), where control serves as the functional equivalent of possession for qualifying digital assets. Control entails the ability to derive substantially all benefits from the record, exclude others from doing so, and transfer control, supported by identifiable records or systems—often achieved through key management, multisignature setups, escrow, or contractual mechanisms.

For secured lending, this is significant because, in amended states, perfection by control can yield superior priority compared to filing alone, depending on the collateral and structure.

Practical implementations include lender-controlled multisignature arrangements (preventing borrower transfers without approval), smart contract escrows linked to repayment or default conditions, or qualified custodian setups that grant the lender exclusive transfer authority upon default.

A note of caution: Article 12 is relatively new, with developing case law. Clearly document the control mechanisms (e.g., who can transfer the asset, under what conditions) to substantiate it if contested. 

Track B: Article 8 & Intermediated Investment Property Structures

The framework under Article 8 and Article 9’s investment property provisions is well-suited for assets held through a securities intermediary, where the custodian maintains a securities account and treats the asset as a financial asset (parties may opt in via agreement under UCC §8-102(a)(9)). For true investment property, control-based perfection is established and reliable, with priority rules favoring control.

Institutions prefer this approach due to its operational familiarity, including account control agreements, entitlement orders, and integration with existing compliance and monitoring systems.

Addressing Proceeds: Tracing & Perfection

Even when the primary collateral consists of cryptocurrencies, NFTs, or tokens, proceeds frequently manifest as fiat in a bank account. Lenders should prioritize proceeds by identifying destination accounts, employing deposit account control, and incorporating covenants for tracing and reporting to follow the path from collateral to disposition to proceeds. Under Article 9, perfection in proceeds can often attach automatically if the original collateral is perfected but enhancing it through targeted strategies is advisable.

A Practical Best Practice Framework

For most lenders, a layered strategy offers the strongest defense: (i) File a UCC-1 statement encompassing relevant collateral categories and proceeds;  (ii) Secure control where available and commercially viable, whether through direct methods, multi-signature, escrow, or intermediary arrangements;  (iii) Implement operational safeguards, such as covenants restricting transfers, ongoing monitoring, reporting requirements, default provisions, and clear remedies;  and (iv) Develop a proceeds management plan, potentially including controlled or blocked accounts.

This method aligns legal perfection with practical enforcement capabilities.

Final Considerations

Perfecting security interests in digital assets requires a tailored approach, influenced by classification, custody, and jurisdiction. The UCC’s modern tools, particularly around control, enhance options, but success hinges on demonstrating control effectively while supporting it with filings and proceeds diligence. This approach substantially mitigates priority and bankruptcy risks.

This post is general information, not legal advice. Digital-asset collateral structures are highly fact-specific and state adoption of UCC amendments varies.

For more information, or to seek counsel from our Business & Corporate practice group, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Perfecting Security Interests in Digital Assets: Navigating UCC Options in 2026 appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

On October 13, 2025, the J.M. Smucker Company (“Smucker”) filed a federal lawsuit in the U.S. District Court for the Northern District of Ohio against Trader Joe’s, claiming the grocery chain’s frozen peanut butter and jelly sandwiches are illegal copycats of Smucker’s famous Uncrustables®. Smucker alleges that Trader Joe’s “Crustless Peanut Butter & Strawberry Jam Sandwiches” copy the distinctive look and branding of Uncrustables. In particular, Smucker’s Complaint (link here: link ) highlights that Trader Joe’s sandwiches are round and crustless with the same “pie-like” crimped edges as Uncrustables. The complaint describes Trader Joe’s product as “an obvious attempt to trade off of the fame and recognition” of the Uncrustables brand. According to Smucker, the nearly identical design and packaging could confuse consumers into thinking Trader Joe’s sandwiches are made by or affiliated with Smucker.  

Smucker’s Uncrustables®

Trader Joe’s Crustless Peanut Butter & Strawberry Jam Sandwiches

Uncrustables have become a massive business for Smucker. The Ohio-based company disclosed in the lawsuit that it now sells approximately 1.5 billion Uncrustables sandwiches per year and has invested over $1 billion in developing and marketing the brand over two decades. Given this success, Smucker considers the round, crimp-edged sandwich design and its blue packaging elements to be valuable intellectual property.  In fact, Smucker has obtained federal trademark registrations covering the sandwich’s unique shape (a “round pie-like shape with distinct peripheral undulated crimping”) as well as the bitten-sandwich image used on its packaging. 

Trade Dress Legal Issues: Distinctiveness vs. Functionality

The dispute raises important questions about trade dress protection for food products. Trade dress refers to the distinctive visual appearance of a product or its packaging that signifies the product’s source. Under U.S. trademark law (the Lanham Act, 15 U.S.C. §§ 1051 et seq.), trade dress can be protected if it is distinctive (i.e. consumers associate the design with a particular source) and non-functional.  Smucker claims that the Uncrustables design has acquired this distinctiveness – known in trademark law as “secondary meaning” – due to the sandwich’s long-term popularity and extensive promotion.  The company argues that the round, crimped-edge look and blue color scheme of Uncrustables are now closely identified with Smucker in the minds of consumers, beyond any mere utilitarian purpose. 

However, Trader Joe’s is expected to challenge those assertions. A key issue will be whether the shared features are purely functional or serve as brand identifiers. Trader Joe’s could argue that the crimped, crustless round shape is functional – it seals the sandwich to keep filling inside and eliminates messy crusts – and thus cannot be monopolized by one company as a trademark.  If a design is deemed functional, it is not legally protectable as trade dress, regardless of consumer recognition. Notably, Smucker itself once secured patents in 1999 for its “sealed, crustless sandwich” innovation. The existence of those early patents suggests the crimped-edge design had practical advantages, a point that may bolster Trader Joe’s functionality defense. Trader Joe’s might also highlight small differences (for example, its sandwich reportedly has a slightly more square shape) to argue that its product is not a slavish copy of Uncrustables’ design. 

Another legal question is whether the Uncrustables trade dress was distinctive before Trader Joe’s entered the market.  Because product design trade dress cannot be inherently distinctive, Smucker must prove that consumers recognize the round, crustless PB&J and its blue packaging as uniquely Smucker’s – a burden it will try to meet with evidence of its large sales and marketing investment. 

Smucker’s lawsuit asserts multiple causes of action under the Lanham Act and related laws, including trademark and trade dress infringement, trademark dilution, false designation of origin, unfair competition, and deceptive trade practices. All of these claims hinge on showing that Trader Joe’s look-alike sandwiches are confusing consumers and diluting the Uncrustables brand’s distinct identity.

What is at Stake?

Smucker is asking the court for an injunction to stop Trader Joe’s from selling the crustless PB&J product and to force a recall or destruction of all existing Trader Joe’s inventory and packaging that mimics Uncrustables.  Smucker also wants to recover Trader Joe’s profits from the sandwich, along with damages and attorneys’ fees. Essentially, if Smucker prevails, Trader Joe’s could be required to repackage or pull its product from shelves, an expensive outcome for the grocery chain.

The outcome of this lawsuit will be closely watched in the food and retail industry. If Smucker can prove its Uncrustables design is a distinctive, non-functional mark, it could reinforce the ability of companies to protect the appearance of even simple food products. On the other hand, if Trader Joe’s shows that the round, crimped sandwich shape is functional or not uniquely associated with Smucker, the case could limit how far trade dress claims can go for familiar grocery staples.

For more information or to seek counsel from our Intellectual Property group, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Smucker Sues Trader Joe’s Over “Uncrustables” Copycat appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

By securing your domain name, protecting your marks with trademark registrations, and using clear website terms of service, you’ll strengthen your defenses against imitators and preserve the hard-earned online presence of your business.

Secure Your Business Domain Name Early

Your domain name is your business’s address on the internet, so it’s crucial to claim it before someone else does. Whenever possible, register a domain that matches your business name exactly (for example, YourBusinessName.com). Once you obtain rights in a domain name, no one else can use it, making it one of the easiest ways to protect your online presence.

Be sure to claim domain names tied to your business name, key brands, and trademarks early – ideally, as soon as you settle on a business name and/or brand name – to avoid having cyber-squatters claim your preferred domain name(s). 

Protect Your Brand with Trademark Registrations

A trademark registration is a legal tool that protects your trademarks – for example, words, slogans, and logos – that you market and sell your goods or services under. Federally registering your marks allows you to prevent anyone else in the country from using them to market or sell similar goods or services. They are a powerful tool and provide cost-efficient protection. 

Use Clear Terms of Service to Protect Your Content

Your website’s Terms of Service (TOS) is not just fine print, it’s a valuable tool for protecting your original content and setting the rules for site visitors. In your TOS (sometimes called Terms of Use or Terms & Conditions), include language that explicitly states your business owns all the content published on the site (text, images, videos, etc.) and that you reserve all rights to that material.

By clearly declaring your ownership, you put visitors on notice that things like your blog posts, product descriptions, and photos belong to your business and are not free for others to copy or republish.  Having a well-drafted TOS offers additional benefits as well. It can limit your liability, set guidelines for user behavior, and generally establish a professional tone for your website.  

Protecting your small business’s online presence from copycats might sound daunting, but it really comes down to a few proactive steps. By taking action early, you can prevent confusion among customers and save yourself the headaches associated with dealing with imitators later on. In the end, defending your online presence allows you to focus on what matters most: running and growing your business with confidence.

To seek counsel from our Intellectual Property practice group, please reach out to request a consultation or call us at 216-696-1422.

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In celebration of National Small Business Month, we proudly recognize the contributions of small businesses in our community. McCarthy Lebit is committed to supporting entrepreneurs and business owners with trusted legal guidance through every stage of their journey, from formation to growth and beyond. As a law firm deeply connected to the small business community, we’re proud to serve as trusted advisors and advocates for business owners throughout the region.

This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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