Thursday, February 12, 2015

Equitable Division of Patents in Divorce

In Ohio, in the context of equitably dividing marital property, the term "during the marriage" is statutorily presumed to run from the date of the marriage through the date of the final divorce hearing. Ohio Rev. Code Ann. §3105.171(A)(2)(a).

However, if the court determines that the use of either or both of these dates would be inequitable, the court may select dates that it considers equitable in determining the value of marital property. Ohio Rev. Code Ann. § 3105.171(A)(2)(b).

It is not uncommon for the court to select the date of separation, the date the parties stopped living together as husband and wife, as the most equitable date for capping the division of marital property. The “Date of Separation” can be critically important regarding division marital interests in patents. Some patents are clearly identifiable as pre or post marital assets, not subject to division.

Generally, spouses who claim marital interest in a patent can hire appraisers to value the property. On the one hand, this can be expensive and speculative. On the other hand, if the rights are subject to valuation, such an option can allow for final division of property without future entanglements with the ex-spouse.

Another option is to negotiate a division of income or royalties from the intellectual property on a go forward basis. Such a division can involve the spouse who manages the property and who is responsible for enhancement of the property value receiving compensation for his or her post divorce labor. This approach also requires agreement on the proportion going to each spouse which can be contentious.

Some patents regarded as marital property can be shown to have no fair market value (the value in money of any property for which that property would sell on the open market by a willing seller to a willing buyer).

The use of a patent valuation expert may be of critical importance. A patent regarded as marital, not prior marketed, may be argued as having no value. The court can only consider evidence before it, unless a later motion alleging such grounds as fraud, newly discovered evidence that through reasonable diligence could not have been discovered at the time, etc., is brought by an aggrieved ex-spouse.

The above information is not offered as, and does not constitute, legal advice. The information presumes you are not currently represented by an attorney who knows your specific circumstances.


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