Protection of a person’s business and intellectual property is a complex issue, especially when you intertwine marriage. Whether it be a copyright of your tech software, a secret recipe from your generational family business, or a patent for your new invention, a desire to protect your assets and the hard work you and/or your family has made is not unusual. In Ohio, there are ways to protect these assets before and after marriage.
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.
