Intellectual Property Division in a Georgia Divorce

Dividing intellectual property (IP) is one of the most intricate aspects of asset division during a divorce in Georgia. From patents and copyrights to royalties and trademarks, these intangible assets often hold significant financial and emotional value, making their division a complex legal challenge.

This article explores how intellectual property is handled in the Georgia divorce process, offering insights into the division of assets, valuation methods, and practical strategies for protecting your rights.

Understanding Intellectual Property as Marital Property

In Georgia, marital property includes all assets acquired during the marriage and subject to equitable distribution, even if only one name is on the title. By contrast, separate property are assets that are not divided during divorce and stay solely with the owning spouse.

Is IP considered separate property or marital property? To answer this, courts consider whether the asset was created during the marriage and its potential future value. For example, royalties from a book written during the marriage may be split between spouses.

In general, intellectual property produced or obtained during a marriage is regarded as marital property and is distributed fairly. However, IP created before the marriage or explicitly designated as separate property may not be divided unless it has been commingled with marital assets.

Types of Intellectual Property in Divorce

• Patents: Protect inventions and grant exclusive rights to the creator
• Copyrights: Cover original works like books, music, or software
• Trademarks: Protect brand names, logos, or slogans
• Trade secrets: Include confidential business information like formulas or processes
• Royalties: Income generated from licensing intellectual property.

Georgia's Equitable Distribution Laws

Georgia follows the principle of equitable distribution rather than equal division. This means that marital assets are divided fairly based on factors such as:

• The length of the marriage
• Contributions of each spouse (financial and non-financial)
• Future earning potential
• Health and age of each spouse
• Custodial arrangements for children.

Steps to Divide Intellectual Property

1. Identify and Classify Assets

The first step is to determine whether the intellectual property is marital or separate. For instance:

• A patent filed before marriage but generating income during the marriage may have its royalties classified as marital property.
• Copyrights or trademarks created during the marriage are typically considered marital assets.

2. Valuation of Intellectual Property

Valuing IP is challenging due to its intangible nature. Courts often rely on experts to assess its worth using methods like:

• Market approach: Comparing similar IP sales
• Income approach: Projecting future earnings from royalties or licensing fees
• Cost approach: Estimating the cost of recreating the IP.

3. Determine Division Methods

Once valued, intellectual property can be divided in several ways:

• Buyout agreements: One spouse compensates the other for their share.
• Revenue sharing: Future royalties or licensing fees are split.
• Asset trade-offs: One spouse keeps the IP while the other receives equivalent assets like real estate or retirement funds.

Challenges in Dividing Intellectual Property

Valuation Disputes

Disagreements over an asset's worth are common. For example, a patent's future profitability might be speculative, leading to contention.

Ownership Rights

If a business owns the IP (for example, a trademark registered under a company), it may not be divisible as marital property.

Future Earnings

Royalties and licensing fees can extend years after divorce, complicating equitable division.

Protecting Your Rights During the Division of Assets

Hire Experts

Engage financial advisors, professional appraisers, and IP valuation specialists to ensure accurate asset assessment.

Gather Documentation

Compile evidence of contributions to IP creation, including financial investments or creative input.

Work with an Experienced Attorney

An attorney specializing in high-asset divorces can navigate complex legal issues surrounding intellectual property.

Example Scenarios: Dividing IP Under Georgia Family Law

Consider this hypothetical example: Sarah authored a bestselling book during her 10-year marriage to John. In their divorce proceedings, John argued that he supported Sarah financially while she wrote the book, making its royalties marital property. The court agreed and awarded John a percentage of future royalty income.

In another theoretical scenario, Michael developed software before marrying Lisa but continued refining it during their marriage. The court ruled that any income generated from licensing agreements signed during their marriage was marital property.

Navigating the Complexities of IP Division? Secure Your Future Today

Dividing intellectual property in a Georgia divorce can be an overwhelming and intricate process, but with the right guidance, you can ensure your assets are protected and fairly distributed. Whether you're dealing with patents, royalties, or trademarks, having an experienced attorney by your side is essential to navigating the complexities of IP division.

Work with us at the law office of Attorney Sharon Jackson. We specialize in handling high-asset divorces and have the experience to help you secure the best possible outcome. Contact us today at (678) 909-4100 to schedule a consultation and discuss how we can safeguard your intellectual property rights during your divorce. Let us help you move forward with confidence and clarity.