Attorney Discusses Copyright and Trademark Valuation in a Montgomery County Divorce
Outstanding Representation in Complex Divorces
Patents, copyrights, trademarks – all of these forms of intellectual property hold a lot of weight in the modern business world. A single copyright in the right hands could be the key to launching ahead of all other competition, and many business partnerships are built on responsible and shared access to intellectual property. But when the business partners are also married, those invaluable deals can be put at risk in a divorce, and even an original idea can become subject to Pennsylvania property division laws.
When working through a divorce, determining the value of a business comes down to the skill of your attorney who will place a monetary value on all its intellectual property. At the Law Offices of Sheryl R. Rentz, P.C., our Montgomery County family law team has spent decades investigating business assets, valuing marital property, and negotiating fair divorce agreements for our clients. Let us do the same for you.
To get a free case evaluation from an experienced Montgomery County divorce attorney, call us at (610) 645-0100.
When Is Intellectual Property Considered a Marital Asset?
Intellectual property — including copyrights, patents, trademarks, and trade secrets — can be treated as marital assets if they were acquired during a marriage. Intellectual property is typically acquired alongside the launching of a family business and can range from original logos to patented software. If a couple launched a business together, such as one member handling production and the other handling marketing, then all assets related to the business can be subject to property division in a divorce.
Montgomery County follows equitable distribution laws when dividing property in a divorce. Under these laws, each party must receive a fair share of all marital assets, but that does not mean equal or 50/50. A family law court will look at several factors when determining what is fair for each party, including the length of the marriage, each party’s age, personal incomes, and the standard of living.
With regards to a business, there are several intangible forms of property that can be considered marital assets and be subject to property division. For example, let us say a couple started a bakery together in Norristown. This bakery has several tangible assets, including monthly profits, furniture, ovens, tools, and rental agreements, that the owners can set a monetary value to.
However, it also has intangible assets like a well-known local name, an eye-catching logo, popular recipes, and a mascot. The copyright and trademarks for these intangible assets can be worth more than the physical space of the bakery and provide significant profits down the line. During a divorce, it is important to identify all tangible and intangible assets in a family business and calculate their monetary value properly to fairly divide them.
Determining the Value of Trademarks and Copyrights
There is no easy way to put a price tag on an idea, whether it is a slogan, business jingle, or product. Intellectual property can increase in value over time, and both sides of a divorce will want their fair share of the profits. How long the business has been in operation can play a major role in this, as a new business may not have a clear value, while an older one may have a history of turning a profit.
There are several techniques the Law Offices of Sheryl R. Rentz, P.C. uses to measure the value of intellectual property in a divorce, including:
- Cost Approach: The cost approach considers the process of developing a patent, copyright, trademark, or other intellectual property. It factors what money a business professional would need to create the same product today. With this approach, the focus is on looking at the start-up costs for intellectual property rather than the long-term value.
- Market Approach: With this method, a financial expert will take into account the value of the intellectual property in a competitive market. When looking at the bakery example, a recipe’s value could be determined based on how similar recipes have sold under the same circumstances.
- Income Approach: The income of the intellectual property can grow or depreciate over time, and this approach accounts for how a business will profit off of the intellectual property over time. An income approach involves estimating the income acquired from the property during the marriage as well as future earnings based on historical trends and potential drops in income, such as if a trademark becomes public domain or a patent receives competition.
Dividing Assets in a Pennsylvania Business
Splitting any assets in a divorce is never an easy process, and a business only makes the matter more complicated. Determining the value of copyrights and trademarks is only one step in calculating the overall value of the business, and it often deals with more estimates than valuing tangible assets. In any case, it is important to work with an experienced attorney who can discover all assets, calculate their monetary value, and negotiate for your fair share.
When dividing this property, you may need to come to several agreements about how a business will continue to operate or how assets will be distributed. You may argue that you had the original idea for a business’s name and logo, while your spouse may have a strong right to the equipment used for manufacturing products. Assuming you are not liquidating all of the business’s assets, you may be able to negotiate for the intellectual property rights to retain ownership, but may also have to agree to stay out of certain markets or regions to avoid competition.
Protecting Your Interests in a Divorce
There is no one-size-fits-all approach to dividing a business during a divorce, and many approaches will involve complex agreements between both parties. At every step of the way, you should have an experienced Montgomery County family law attorney at your side who can explain your rights and defend them during mediation or in court.
At the Law Offices of Sheryl R. Rentz, P.C., our team has served numerous clients throughout Montgomery County in complex high-net divorces with complicated assets. We can sit down with you in a free consultation, go over the nature of your divorce, explain your options, and advocate for your fair share. To work with an attorney with more than 25 years of experience, call us at (610) 645-0100 for a free case evaluation.
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