Protecting the Right to Patent Royalties in Divorce

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Patents and other intellectual property are assets that may be considered marital property subject to equitable distribution in divorce depending on the circumstances. When such assets are marital property, they can pose some unique issues. One of these concerns is that a patent may not have much value at the time of the divorce but appreciate significantly thereafter. If you are considering divorce, it’s essential to work with an attorney and other experts who understand how to handle the division of patent rights fairly.

When Are Patents Considered Marital Property?

The key question in evaluating patents is when they were acquired or created. Marital property is property created or acquired after the parties’ wedding date and up to the date a divorce action is filed. Separate property is property that is either created or acquired before the parties marry, as a gift specifically to one party of the marriage, or through an inheritance during the marriage. Generally, separate property is not divided in divorce.

How Do You Determine What Patents Exist?

Your spouse is required to disclose any patents as part of the discovery process. However, it is also advisable to hire a patent search firm to locate any existing patents filed with the U.S. Patent and Trademark Office. In addition, the firm can look for any patents that have been applied for but not yet approved. In this way, you can identify all patents that may be marital property.

How Do You Value a Patent for Divorce?

Valuing patents can be complicated. There are various methods that consider whether the patent is generating any income, if there are comparable patents, the costs to monetize the patent and other factors. A valuation expert can make a determination based on the specific facts and circumstances.

What Happens If a Patent Becomes More Valuable Post-Divorce?

The patent will be valued and divided at the time of the divorce. However, the right to the patent revenue or royalties continues after divorce. Patents have a 20-year lifespan, so it is critical to keep track of any approved or unapproved patents created during the marriage for the 20-year life span after the divorce. If the patent subsequently makes money, you can bring a post-judgment action seeking your equitable share to the extent your spouse has not been forthright in this regard. 

If you are considering divorce, contact us for a consultation to learn how we can advocate for your interests and help obtain the best result in your case.

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