In a divorce in Georgia, the Court has the power to equitably divide property acquired by the labor of the parties during a divorce. For the most part, this means tangible items like houses, cars, retirement accounts, and bank accounts. But what does the Court do with intellectual property—how can they equitably divide an idea?
Georgia Courts have not specifically addressed whether a patent is a marital asset, but they have addressed intellectual property in the form of legal and medical degrees. In Lowery v. Lowery, 262 Ga. 20 (1992), the Supreme Court of Georgia held that the education and degree of the Husband were not akin to real property, and could not be valued as an asset upon divorce. The Court stated that the value of the intellectual property was “too speculative to calculate, being simply the possibility of enhanced earnings they provide. That potential may never be realized for any number of reasons.” The Court went on to state that a degree cannot be transferred and its value terminates upon the death of the Husband. However, unlike a non-transferable asset like education, patents can be sold and there is a thriving market in the sale of patents. Further, patents generate tangible (or otherwise valuable) assets—a patent was behind the creation of every piece of modern technology.
The distinction between a patent and a degree is that a patent is the property of the creator, and the right to intellectual property is one granted by the Constitution, thus it is the right of the creator to sell the patent as he or she chooses. Based on the constitutional granting of these rights, the Georgia courts could take the view that patents are non-marital assets, but include a patent’s potential when considering a party’s ability to pay alimony. Further, the income generated from a patent or intellectual property could be considered income, and a former spouse could receive an entitlement to a percentage of the income generated from the patent as an equitable division of property.
Again, the Supreme Court of Georgia has not addressed this issue in particular, but the Court may look to the case of Goldstein v. Goldstein, 262 Ga. 136 (1992) to determine the value of intellectual property. In Goldstein, the Supreme Court found that the income from an attorney’s contingent fee agreements was not a marital asset due to the fact that it was “nearly impossible” to determine the amount of work and expense that would go into generating income from intellectual property. This would mean that even if the Court determined that a former spouse was entitled to a percentage of the income generated from a patent, the income may never be realized.
The number of international patents filed in 2010 alone totaled more than 160,000, so although Georgia courts have determined that the value of intellectual property is speculative, it is clear that it is an issue that the court will soon have to address.
By Elizabeth Doak, Associate, Meriwether & Tharp, LLC