Some types of property are relatively easy to divide. Spouses may agree about their value and how to divide it fairly, or the property can be sold and the proceeds split evenly between them. However, other types of property, including intellectual property, are more difficult to value and divide.
Intellectual property represents creative work, and it’s important to determine how to distribute this property during the process of divorce in a way that fairly reflects the parties’ contributions.
What Is Intellectual Property?
Many people underestimate the type and value of intellectual property they own. Intellectual property refers to creative creations, including inventions, artistic works, designs, and symbols. Intellectual property rights give creators the right to recognition for their work or financially benefit from it.
Intellectual property can take many forms and may include:
- Copyrights
- Patents
- Trademarks
- Royalties
- Databases
- Websites
- Publications
- Software
- Photos
- Drawings
- Artistic works
- Trade secrets
- Inventions
- Literary works
- Designs
- Symbols, names, and images used in commerce
In some cases, intellectual property is very valuable and an integral part of the divorce.
Colorado’s Property Division Rules
Colorado is an equitable distribution state. Therefore, the court has the power to divide property between the spouses in a way that it considers fair and equitable. This is not always equal.
The court begins by differentiating separate property from marital property. Marital property is property that either spouse obtained during the marriage. Marital property is subject to division during a divorce.
Separate property is property the spouses had before the marriage, gifts, inheritance, and property obtained through the proceeds of separate property.
The couple can reach an agreement about how to divide their marital property. If they are unable to reach such an agreement, the court can consider various factors to determine how to divide it, such as:
- The duration of the marriage
- Each spouse’s contributions to the marriage
- The financial needs of each spouse
- The value of separate property
- Child custody arrangements
- Any increases or decreases in the value of separate property
Process of Dividing Intellectual Property
The process of dividing intellectual property in Colorado typically involves the following steps:
- Identifying intellectual property – The spouses and their attorneys work to identify all intellectual property that will be divided during the divorce.
- Evaluating intellectual property – The spouses and their attorneys may provide documentation regarding each spouse’s contribution to the intellectual property. They may also hire experts or determine a fair way to value the intellectual property. Depending on the type of intellectual property involved, this could include the market, income, or cost approach.
- Negotiating the division of intellectual property – You may be able to reach an agreement with your spouse regarding intellectual property. You should carefully consider the potential future value of the intellectual property and tax ramifications, folding in this property with the other property subject to division. If you reach an agreement, the terms should be clearly laid out in an agreement you submit to the court for approval.
- Litigating the case – If you and your spouse are unable to reach an amicable agreement, you may need to ask the court to determine how to divide the property. At a hearing, you present evidence and your arguments for your preferred method of division.
Contact Our Property Division Lawyers for a Confidential Case Review
Dividing intellectual property can be complex, but a Boulder property division attorney at Stahly Mehrtens Miner LLC has extensive experience handling these matters. Contact us today at (303) 797-2900 to speak with us during a confidential consultation.