For many spouses, the most complex property that they need to divide is the family home. For other spouses, there may be much more complex and abstract pieces of property that need to be addressed. While intellectual property can be abstract and difficult to accurately evaluate, it can also be worth incredibly large sums of money. Indeed, some pieces of intellectual property may be the most valuable assets in question during a divorce. So how are these matters approached?
Determining the True Value of Intellectual Property
The first step is to determine how much money the intellectual property is actually worth. Intellectual property is an example of an “intangible asset,” which means that it exists in an abstract form. At its core, intellectual property is just an idea. Examples include patents, software, trademarks, copyrights, and trade secrets. These assets may be more common in divorces than ever before thanks to the prevalence of high-tech companies in the modern era. However, their true value can be very difficult to determine due to their intangible nature.
If intellectual property has not yet been “realized” as a functioning company or a source of income, then various steps must be taken to identify and measure its potential during the early, pre-revenue stages. However, it is important to realize that the person who actually invented the new software, technology, or idea does not always hold the patent. In some cases, a company will hold the patent or copyright, and so this company reaps all the economic benefits from the future monetization of that patent.
Intellectual property is often divided by splitting future profits. In the case of a book series, both spouses would split the royalties from all future books published within that series. It is also worth mentioning that both spouses would likely receive a portion of any settlements awarded from copyright lawsuits that center around the theft of the intellectual property in question.
Concealed Intellectual Property
Intellectual Property is one of the easiest things to conceal during a divorce. IPs are not regularly reported or valued in financial statements, and this is understandable for many reasons. After all, IPs often go hand in hand with trade secrets, and a company is not likely to make their trade secrets accessible to the public. However, a spouse may still face legal consequences if they fail to disclose these IPs, as this can be interpreted as concealing assets.
Author Accused of Concealing Future Projects Worth Millions
Here is an example of how intellectual property can lead to issues in divorces: In September of 2021, it was reported that author Dan Brown was facing a considerable legal battle due to his alleged decision to conceal intellectual property from his former wife during their divorce. The author credited his wife with helping him start his career, but he was later accused of concealing future projects worth millions. The book at the center of this legal battle was “The Lost Symbol,” which the author allegedly never revealed to his wife during the divorce. Reports stated that the wife asked for three times the value of these alleged undisclosed future projects in her 2020 lawsuit.