Dividing your marital assets during a divorce can be difficult, especially when valuable assets such as intellectual property (IP) are at stake. Generally, IPs are much more valuable than tangible assets. As such, many couples wonder if there are any ways in which they can protect their IP during the division of assets, as they want to ensure they receive a fair distribution that accurately reflects their contributions throughout the marriage. If you are concerned about what will happen to your IP during property distribution, please continue reading and contact an adept Ocean County Property Division Attorney who can help you safeguard your hard-earned assets.
What is intellectual property (IP)?
Intellectual property (IP) is an umbrella term for intangible assets that are creations of the mind. This includes inventions, literary and artistic works, symbols, images, names, and logos used in commerce. IPs are legally protected from outside use or implementation without consent through patents, copyrights, trademarks, and royalties. IPs give people the opportunity to benefit from their creations financially.
IPs are the most complex assets to divide. Before you begin divorce negotiations, it is imperative to determine an accurate valuation of your IPs that have been acquired during the marriage. If an IP was developed or acquired during the marriage, it will be subject to division. In New Jersey, property division is governed by the principle of equitable distribution. This means that the court will divide the divorcing couple’s marital assets fairly between spouses, considering several factors. It is critical to note that equitable does not always mean an even 50/50 split.
While this type of asset is not divisible, the IP rights or royalty payments that either party receives will be subject to division if they were acquired during the marriage. Royalties are payments made by a licensee to a licensor in exchange for using their IP. Generally, they are the percentage of the gross revenue the IP earns, paid regularly. Royalties are vital in controlling your IP rights, allowing you to earn income from your creations.
What factors are considered by the court during property division in New Jersey?
As mentioned above, IP ownership can be divided if deemed a marital asset. Therefore, the court will consider several factors to determine whether they should award either party royalties. The most significant aspect the court will consider is the contribution of each spouse to the creation of the IP. If one spouse did not contribute to the IP, it may be regarded as separate property, meaning it would not be subject to division. They will also consider the value of the IP and whether there are any agreements between spouses regarding the IP. If a prenuptial or postnuptial agreement stipulates how IPs are to be divided during a divorce, the court will adhere to what the couple specified in these legal contracts. Furthermore, they will consider the IP income generated during the marriage and its potential future income.
If you are worried about what will happen to your intellectual property during property distribution, it is in your best interest to contact a dedicated Ocean County property division attorney from the Law Office of Sarina Gianna, LLC, who can help safeguard your rights.