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Protecting Your Intellectual Property During Separation and Divorce




Divorce is a complex emotional and legal process, especially when one of the spouses is unwilling to sign an amicable divorce. When you're a business owner, an additional layer of concern is added – what about your confidential business information, trade secrets, intellectual property?


When marital assets are divided during a divorce, intellectual property (IP) can be a complex and valuable consideration. Unlike a house or car, IP can be trickier to value and requires specialized knowledge to make it right. Courts generally cannot and do not force a spouse to keep away from the information they already know, if no agreement has been signed regarding the matter.  


During your marriage, you likely shared an ocean of information with your spouse, perhaps even granting them access to your company´s most valuable trade secrets. Now, facing the divorce procedure, the question on whether your spouse will want to use your business information and resources stays open. In our experience, the smallest details count when it comes to a contentious divorce where one of the parties wants to use the other´s business trade secrets, client list, or even a confusingly similar business name.


Separate vs. Marital Property


A crucial step is determining whether your IP is considered separate or marital property. Separate property generally refers to assets you owned before marriage or acquired independently during the marriage (e.g., through inheritance). Marital property, on the other hand, encompasses assets accumulated jointly during the marriage.


  • Scenarios for Separate IP: If you developed the IP entirely before marriage, it's likely considered separate property. However, your spouse's lawyer might argue that the IP's value increased during the marriage due to their contributions (e.g., managing finances that allowed you to focus on development).

  • Scenarios for Marital IP: If you created the IP during the marriage, especially with any spousal support, it's likely considered marital property subject to division. Owning a business together that generates IP would also fall under this category.


Protecting Your Interests


At AMG Attorneys, our divorce attorneys with expertise in intellectual property law can guide you through the complexities of IP valuation and division. We can:


  • Identify and classify your IP assets


  • Work with valuation experts to determine the fair market value of your IP


  • Negotiate a fair and equitable division of your IP in the divorce settlement


  • Negotiate a Non-Disclosure Agreement or NDA prohibiting your spouse from disclosing or using your company´s confidential information. While courts cannot enforce NDA´s directly, including one in your divorce settlement provides a strong deterrent and potential legal recourse in case of a breach.


  • Draft clear and enforceable agreements regarding future ownership and usage rights



Don't let your intellectual property become a point of contention during your divorce. Consider calling AMG Attorneys and schedule a consultation with our experienced divorce attorneys.

 


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