Addressing Intellectual Property Created During the Marriage

When a couple decides to divorce, dividing marital assets can be complex and contentious, especially if one of the parties created intellectual property during the marriage. While an accurate valuation of such property is essential to ensuring a fair division of assets, determining the value of intellectual property can be challenging. If you have questions about the division of intellectual property or other assets during marriage, it is advisable to consult an attorney at your earliest convenience. At McClure Law Group, our trusted Dallas divorce attorneys are proficient at addressing intellectual property created during marriage in divorce actions, and if you hire us, we will fight to help you seek the outcome you deserve.

Intellectual property created during the marriage is typically considered community property under Texas law. Community property refers to all assets acquired or created during the marriage, regardless of which spouse generated the property or holds the title. This includes inventions, creative works, business ideas, and other intangible assets that have value or the potential to generate income. For example, if one spouse develops software, writes a book, or secures a patent during the marriage, the resulting intellectual property is generally subject to division in the divorce. Even if only one spouse worked on the intellectual property, the law recognizes the marital contribution to its creation, such as financial support, time, or resources provided by the other spouse.

The valuation of intellectual property is often one of the most challenging aspects of addressing intellectual property created during the marriage in divorce proceedings. Unlike physical assets, intellectual property is intangible, and its value can be speculative, especially if the intellectual property has not yet generated income.

Texas courts will typically rely on financial experts or appraisers to determine the fair market value of the intellectual property based on factors such as current income generated by the intellectual property, future earning potential, market demand for the asset, development costs and efforts, and the intellectual property’s contribution to a business or industry. For example, if one spouse wrote a book that has yet to be published or an invention that has not yet been patented, the potential value of the intellectual property must still be assessed.

Disagreements often occur when one party argues that the intellectual property has little to no current value, while the other spouse insists it represents a significant marital asset with long-term earning potential.

In Texas, community property, including intellectual property, is subject to equitable division. This does not necessarily mean that the intellectual property itself will be split equally; instead, courts aim to divide the marital estate in a manner that is fair and just to both parties.

There are several approaches to dividing intellectual property. The court may award full ownership of the intellectual property to the spouse who created it, while compensating the other spouse with a larger share of other marital assets to balance the division.

Alternatively, if the intellectual property generates income through royalties, licensing fees, or other revenue streams, the court may order that these earnings be shared between the spouses. In rare cases, the intellectual property may be sold, and the proceeds divided between the parties, although this option is less common due to the unique and often personal nature of intellectual property. Each case is unique, and the method of division will depend on the specific circumstances of the intellectual property and the financial situation of the parties.

Intellectual property often represents years of hard work, creativity, and investment. If you or your spouse created intellectual property during the marriage, it is essential to take steps to protect your rights and ensure that the property is accurately valued and fairly divided. At McClure Law Group, our experienced Dallas divorce attorneys are committed to protecting our clients' rights, and if you are facing a divorce involving intellectual property we can provide the guidance you need to achieve a fair and equitable outcome. Our main office is located in Dallas, and we also have a Collin-County office in Plano where we meet clients by appointment. We frequently assist individuals in divorce matters in Dallas, Fort Worth, Rockwall, Frisco, McKinney, Irving, Richardson, and Garland, as well as cities across Dallas, Collin, Denton, Rockwall, Tarrant, and Grayson Counties. To learn more about how we can help you, contact us today at 214.692.8200 or complete our online form to schedule a confidential consultation.