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Investigate the value of your IP during a divorce

On Behalf of | Jun 5, 2023 | Firm News

Intellectual property is an intangible source of value that you may need to divide somehow in your marriage. While you cannot cut a car in half and split it evenly with your spouse, there are many ways to divide up IP.

Knowing how to value your IP is step one to determining the best way to divide it.

What is IP?

Intellectual property refers to the broad categories of creative work. If you write a novel that sells 1,000 copies, the value of your IP is not just the price of one book. The value of your novel is the sum total of its revenue to-date, its potential revenue in the future and any permutations that may generate value like movie rights or audio books.

IP applies to copyrights like novels or paintings but it also includes slogans, logos and inventions as well. Anything you made over your marriage may qualify as marital intellectual property.

How do you value IP?

There are three methods that appraisers use: cost, market and income. The cost method estimates how much it might take to create a similar IP from the ground up. The market method compares similar IPs and how much income each produces. The income method looks at past revenue and estimates into the future.

Appraising IP is complex and so is dividing it. Division methods include splitting the rights or giving all rights to one spouse and an equivalent amount of assets to the other. With the right resources and documentation, you have the tools to divide your IP in as fair a way as possible.