How Are Trademarks Divided in a Divorce?
Trademarks, logos, and patents are all forms of intellectual property, which are protected under federal copyright laws. A legal copyright bestows exclusive rights for designers, inventors, authors, and artists to sell their creative works. This is done to encourage innovation by prohibiting others from “stealing” a person’s ideas and profiting from them.
In the United States, copyrighted material is subject to a time limitation, after which it becomes public domain, free for anyone to use. However, intellectual property created by a spouse during the course of a marriage is subject to equitable distribution at the time of divorce — unless it is excluded by a prenuptial or postnuptial agreement.
Different Types of Intellectual Property
Common types of intellectual property that may be subject to equitable distribution in a divorce include:
- Trademarks protect terms and phrases used to market a product. This includes brand names, advertising slogans, and other advertising content. The first person to use a brand name or a trademark in association with a product enjoys legal protection against others who would try to use these terms to sell their own products.
- A logo is a graphic mark, emblem, or symbol consisting of text and/or an image that identifies a business. Recognizable logos such as McDonald’s Golden Arches or the Nike Swoosh are powerful marketing tools that enhance brand awareness.
- A copyright protects against unauthorized use of creative works, such as novels, motion pictures, music, and paintings. As a general rule, copyright protection lasts for the lifetime of the author plus an additional 70 years in the U.S.
- Patents protect inventors, granting them exclusive rights to profit from their designs of new products and innovative processes. Examples of valuable patents include computer software and agricultural products such as new types of plants and seeds.
How Equitable Distribution Works
Under Pennsylvania law, most assets that are acquired or created by either spouse during the course of a marriage are considered marital property. Some assets are considered separate property, however, such as assets acquired before the marriage, inheritances and gifts to one spouse received during the marriage, property excluded from the marital estate by a valid prenuptial or postnuptial agreement, and property acquired after separation. Because separate property is not considered part of the marital estate, it is not subject to equitable distribution during a divorce.
Determining the Value of Intellectual Property
Unless intellectual property rights are designated by a prenuptial or postnuptial agreement, they belong to both spouses. That means the two parties will have to come to an agreement about the value of the property in order to split it up in an equitable manner. This can be tricky because the value of IP can fluctuate over time. For example, Van Gogh only sold one painting during his lifetime for 400 francs. However, one of his paintings was sold at auction in 1990 for over $82 million. Not every copyrighted item or idea is a Van Gogh, but these things can still increase in value. That’s why the two parties will have to agree upon a strategy for determining value during divorce proceedings.
Who Has Control Over Intellectual Property After a Divorce?
Another important issue regarding intellectual property is who will have control over how it will be used after the divorce is finalized. For example, let’s say a songwriter composed a number of popular songs during the course of his marriage, and it’s determined in divorce court that all future proceeds from the recording of those songs will be distributed equally to both spouses. We still have the issue of who will decide who gets to record those songs in the future. A strong argument can be made that the songwriter is in the best position to determine which artists should be permitted to record his songs, but this is something that must be spelled out during divorce proceedings.
It’s in the interests of both parties to maximize their future income potential, and working with an experienced lawyer can help. Reach out to the Law Offices of Sheryl R. Rentz, P.C., to set up a free consultation at (610) 645-0100.