How Is Intellectual Property Treated in a Texas Divorce?

Once you have filed for divorce, you start evaluating marital assets that will be subject to division. With a skilled Tomball high net worth divorce lawyer, you can create a division plan and negotiate it with your spouse’s attorney. But first of all, you must be certain that you have a complete list of assets falling under the community property principle. One of the most valuable categories of assets that is often overlooked is intellectual property.

Let us discuss this type of assets and how they may get divided in a Texas divorce.

What Are Intellectual Property Assets?

Intellectual property covers any invention or creation. It is intangible in nature, because it refers to an idea, not a physical object. For example, when we say that a photograph or a book belongs to the domain of intellectual property, it is not the object in itself, but the concept materialized in the object.

The most common forms of intellectual property (IP) are:

  • Patents which protect unique inventions, such as the Apple iPhone mobile phone
  • Copyrights which protect the rights of authors of literary or artistic works, including video games and computer software
  • Trademarks and service marks which protect signs and symbols associated with specific goods or services (for example, the Nike logo)
  • Trade secrets which represent private information of value to the owner, such as the Coca-Cola soft drink formula
  • Licenses which grant others the right to use intellectual property belonging to someone

Are IP Assets Part of the Marital Assets?

Under the Texas community property principle, assets acquired after the marriage represent community property, to be divided during the divorce in a fair and just manner. However, community property may also refer to any kind of income generated during the period of the marriage by an asset acquired by one of the spouses prior to the marriage.

And this is exactly what must be determined in case of intellectual property. While your spouse may retain ownership of the IP asset after the divorce, you have a right to a fair share of the income generated by the respective asset.

However, you need to find a skilled business valuator to calculate the present and potential future value of the IP asset.

revenue generated by IP assets is considered community property

The Challenges of Valuing Intellectual Property Assets

An experienced Tomball high net worth divorce lawyer knows that most IP assets during a divorce refer to inventions developed by tech start-ups. Now, if you look at how many start-ups are incorporated in a given year and compare them to those still operating within 5 years, you realize how volatile this business sector is. This is one difficulty in determining the value of intellectual property assets.

Moreover, if your spouse created an IP asset while being employed by a company or as one of its associates, the patent holder is not the person who did the work, but the company. And these companies often do not list these patents immediately after filing them. In some cases, it takes a lot of time until they become part of the public record – 18 months in case of some patents.

How to Check for the Existence of IP Assets

Since it is an intangible asset, intellectual property is one of the most overlooked types of community property during divorces. Your spouse may not even have to work very hard to hide the existence of this type of property.

However, you can take steps to ensure that all community property is accounted for. Here are a few tips for uncovering IP assets:

  • If your spouse is involved in a tech start-up, there is a high chance that they own IP assets
  • Search for patents in the U.S. Patent and Trademark Office database
  • Hire an IP specialist to investigate your spouse’s company activity and business endeavors
  • Look over past tax returns to identify any disclosure of income from licenses or trademarks

Let a Skilled Tomball High Net Worth Divorce Lawyer Assist You with IP Asset Division!

Intellectual property may be a significant part of your marital assets and you may not even be aware of its existence. This can result in getting an unfair share of the property you are entitled to after the divorce.

An experienced Tomball high net worth divorce lawyer at Bolton Law will make sure that every asset is accounted for and included in the community property. The first step towards a fair divorce settlement is contacting us to schedule an initial appointment. Call us today at 281-519-2287!

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