Your career as an engineer or researcher revolves around pouring your expertise into a breakthrough. After years of work, you have patent rights to an invention or process.
But as you navigate a divorce in Pennsylvania, you wonder: Is the intellectual property (IP) truly yours, or does it belong to the marriage?
The thin line between separate and marital property
If you conceived the idea or filed the patent between your wedding day and the date of your separation, the court views it as marital property. Under Pennsylvania’s equitable distribution rules, a judge must divide the IP fairly between you and your partner. This may involve offsetting its value with other assets rather than splitting ownership of the patent itself.
Your innovation can be separate property if you acquired it before the marriage. However, if the patent appreciated during the marriage due to marital efforts, this change may be subject to division.
The crucial assignment to an employer
Before your IP is up for division, you must determine whether you truly own it. If your employment contract stipulates that all IP you created on the job belongs to your employer, the patent may not be a personal asset at all.
The significance of valuation in dividing complex assets
Valuing a patent is an intricate process due to its intangibility. High-asset divorces often require the help of a forensic accountant to appraise an IP’s value using these methods:
- Income method: This focuses on the future income that the IP can generate.
- Market method: This compares the patent to a similar one in the market.
- Cost method: This calculates the cost to recreate or replace the asset.
Because your work may not see commercial success for years, determining a fair price today requires sophisticated financial modeling.
Finding a solution that addresses patent ownership
Despite the elaborate nature of the IP division, strategic solutions exist. You may opt for a buyout, co-ownership or sale to settle the matter. But before you choose, consider seeking legal counsel to gain proper guidance. Navigating this alone is a risk to your career.
