If you’re an inventor, author, artist, business owner, or another creator, the thought of losing your intellectual property may be very scary! We totally understand why. You put so much sweat equity into your work, and you want to know how to handle it in a prenup. Look no further! In this article, we will discuss how to address intellectual property in a prenup, including the ownership of the intellectual property and making sure it stays confidential.

Understanding Intellectual Property

Intellectual property (sometimes called “IP” for short) refers to creations of the mind, like inventions, literary works, artistic works, designs, and symbols. IP can be protected by patents, copyrights, trademarks, and trade secrets. If you or your future spouse owns intellectual property (or will own IP in the future), it is important to understand the type of IP and its value.

Why Protect Your Intellectual Property with a Prenuptial Agreement?

When entering into a marriage or partnership, it is important to consider the potential impact a marriage and possible divorce may have on your intellectual property. A prenuptial agreement can protect your intellectual property in the case of divorce. Without a prenup, your intellectual property may be considered community/marital property and subject to division in a divorce settlement.

Let’s look at an example to help you conceptualize this possibility. Let’s use a hypothetical JK Rowling example. She owns the copyright in Harry Potter as the author and creator. This copyright gives her exclusive rights over Harry Potter. This means that she can make money by licensing out the rights to use Harry Potter to other people (a.k.a. royalty). If this copyright is deemed marital/community property by a court in a divorce, the royalties may be split between JK Rowling and her spouse. If this copyright is deemed separate property in the divorce, then it is JK’s property and hers alone. A prenup can make sure that this copyright is considered separate property in a divorce.

Identifying Intellectual Property

Before you can address intellectual property in a prenup, you need to identify the IP that you or your spouse owns. This can include inventions, patents, copyrights, trademarks, trade secrets, and even social media accounts. You should also determine the value of the IP, which can be difficult in some cases. You may need to hire a professional appraiser to determine the value of certain types of IP.

Keeping intellectual property separate in a prenup

First, a quick note on separate property: there are generally two categories of property in a divorce, separate and marital/community. If something is considered separate property, it is yours and yours alone, NOT subject to division in a divorce. If something is considered marital/community property, its joint property and is subject to division in a divorce. This begs the question: where will intellectual property fall? Will you let it fall into the marital/community property section and allow it to be “split up” in a divorce? Well, that’s a decision you’ll have to make in your prenup.

Let’s look at an example of what this might look like. Let’s say you own a patent for an invention that you made up (surgical face masks that smell good all day long). The technology to keep your face mask smelling good all day long is unique and complicated, and no one else in the world has this. You may want to consider the value of this patent and if you would be okay with sharing this value in the event of a divorce. If you’re not down to share it in the event of a divorce, then you should probably mark it as separate property in your prenup.

Keeping intellectual property confidential in a prenup

Another way to address intellectual property in a prenup is to make sure it is included in a confidentiality clause. Yes, that’s right, you can include a confidentiality clause that restricts your spouse from talking about your private information, including intellectual property, sort of like an NDA but in your prenup. 

Why is adding this clause beneficial? Well, it can prevent your spouse from sharing proprietary information about intellectual property that you own, which could ultimately be harmful to you in some financial way. 

For example, let’s say you own a tech startup and you own intellectual property in the form of trade secrets, which may include certain processes that make your company special and profitable, like an AI algorithm. You would definitely not want your spouse to share that trade secret with your competitors or make a social media post about all the inside information on your company, including those trade secrets.

Enforcing Intellectual Property Provisions

Regardless of whether or not you have included intellectual property in your prenup, you should make sure your prenup is enforceable by following your state requirements. Now, if you use a lawyer or platforms like HelloPrenup, you shouldn’t have to worry too much about this because they will walk you through the enforcement requirements step-by-step.

Every state has its own rules on what makes a prenup valid and enforceable, however here are some requirements that are true in many states:

• The prenup should be in writing
• The prenup should be signed by both parties
• The prenup should be entered into voluntarily (i.e., not under some type of force like coercion or duress)
• The prenup process included full and fair disclosure of assets and debts
• The prenup and its terms are not unconscionable

If the prenup meets these state validity and enforceability requirements, the intellectual property provisions will be enforced in court. Again, try not to stress too much about this if you have hired a lawyer or are using HelloPrenup, as both will guide you through these requirements.

Frequently Asked Questions (FAQs) about intellectual property in a prenup

We totally understand why you would have questions, so we’ve gathered a list of some commonly asked Q’s below.

Q: Is it necessary to address intellectual property in a prenup?

A: Yes, if you want to create a layer of protection for your IP in the event of a divorce (even if you don’t own IP now). Including IP (existing or future) can protect you from losing the value of that IP down the road.

Q: What types of intellectual property should be addressed in a prenup?

A: Every type should be included. Inventions, patents, copyrights, trademarks, trade secrets, and even social media accounts can be addressed in a prenup.

Q: Can intellectual property provisions in a prenup be enforced in court?

A: Yes, if the prenup meets the legal requirements for enforceability, the intellectual property provisions can be upheld in a court.

Q: Can I protect my future intellectual property rights? 

A: Yes! You can make sure existing, and future IP ownership is addressed in your prenup.

The Bottom Line

If you’re the next J.K. Rowling and looking to protect your creative works, you can make sure that happens in a prenup! Intellectual property is a valuable asset, and it is important to address it in a prenup. By identifying the IP, determining its value, and addressing it in the prenup, you can protect your interests in case of a divorce.

Nicole Sheehey

Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: [email protected]