| Intellectual property rights such as copyrights, | | | | lawyer and accountant. |
| patents and trademarks can be valuable assets | | | | The first step in a divorce is to identify the |
| which should not be overlooked in any divorce | | | | nature of the intellectual property rights that may |
| settlement. This article will briefly look at | | | | exist. A search of the U.S. Copyright Office will |
| copyrights and community property in California. | | | | determine whether the copyright has been |
| In California the case of In Re Marriage of Worth | | | | registered in the U.S. However, copyright |
| established that copyright should be treated as | | | | registration is not a requirement for copyright |
| community property subject to equal division in a | | | | protection and will not reveal works that have not |
| marital dissolution. In that case Susan and | | | | yet been published or exploited or foreign works. |
| Frederick Worth agreed in a stipulated Judgment | | | | For example, a half written book or a story |
| that she would be entitled to royalties from two | | | | outline is not likely to be registered but may still |
| trivia books he authored during the marriage. | | | | have value. Informal or formal discovery methods |
| When Frederick Worth later filed a copyright | | | | can be used to discover copyrighted works from |
| infringement action against the Trivial Pursuit | | | | the creator spouse or interested third parties |
| board game, Susan claimed that she should be | | | | such as book or music publishers, agents, business |
| entitled to half the proceeds of the infringement | | | | or personal managers and accountants. In some |
| action. The Court agreed with Susan and rejected | | | | cases, it might be advisable to join them in the |
| Frederick's arguments that State community | | | | marital proceeding. In the case of a T.V. writer |
| property law was preempted by Federal | | | | you would want to examine all contracts and |
| copyright law. Although the decision has been | | | | royalty statements. In California, section 2100 et |
| heavily criticized by scholars and by other courts, | | | | seq. of the Family Code requires both spouses to |
| it remains the law in California. | | | | make a "full and accurate disclosure" of all |
| This means that when a marriage ends it is | | | | separate and community assets and liabilities and |
| important to identify any copyright that either | | | | to supplement those disclosures through the |
| spouse holds, to place a value on that copyright | | | | proceeding. Failure to do so may result in |
| and to make adequate provision for its division. | | | | sanctions against the non-disclosing spouse and in |
| This is especially important for copyright works | | | | extreme situations an award of those |
| such as literary and music creations which can be | | | | non-disclosed assets to the innocent spouse. |
| licensed and generate future income. For example, | | | | Once you have identified community copyright |
| consider an author who writes a series of books | | | | there are various methods for distribution. With |
| featuring a famous cartoon character. While the | | | | copyright, the cleanest method is for one of the |
| non-author spouse is entitled to fifty percent of | | | | spouses to buy out the other's copyrights |
| the copyright in the books written during the | | | | interests although this can present valuation |
| marriage, what is the situation where the author | | | | problems. Value is often speculative especially with |
| continues to write new books after the marriage | | | | the development of new technologies which can |
| using the same cartoon character? The post | | | | take many years to add value to old properties. |
| divorce books might then be turned into television | | | | Another solution is to equally divide both the |
| shows and movies generating further income. In | | | | ownership and control of the copyright assets. |
| this kind of situation, in creating a settlement your | | | | Often this will be problematic since it may impair |
| attorney will need to distinguish and value the | | | | the creator's ability to commercially exploit the |
| various forms of intellectual property that are | | | | work. By analogy, in dealing with the division of |
| created during the marriage. These will include the | | | | the family business where one spouse has been |
| copyrights in the books and the character, good | | | | responsible for management, it would be rare to |
| will developed by the author and trademark rights | | | | give the other spouse a say in management. That |
| created in the character and the series. It is likely | | | | leaves the other solution which divides ownership |
| that these values will depreciate over time due to | | | | -that is the legal title and right to revenues- |
| post divorce services performed by the author. | | | | between the spouses but leaves control of the |
| This was the situation in the divorce of Charles M. | | | | copyright to the creator spouse. This can create |
| Schulz, the creator of the comic strip "Peanuts". | | | | problems since it gives the creator spouse the |
| His wife of 24 years reached a property | | | | ability to structure deals in such a way that |
| settlement whereby he agreed to pay for a | | | | disadvantages the other spouse. Consider the |
| share of the revenues he received from the | | | | case of Jerry Lewis and Patti Lewis who divorced |
| comic strip after the divorce that would decline | | | | after 35 years. In the divorce, Patti reached a |
| from 27% to 15% over ten years to take into | | | | settlement under which she was entitled to a one |
| account the fact that over time an increasing | | | | half interest in royalties from "Community Titles" |
| percentage of revenues would be attributable to | | | | over which Jerry retained control. This included |
| his personal efforts. | | | | the Nutty Professor which was remade by |
| It is important to distinguish between the physical | | | | Universal with Eddie Murphy. In a subsequent |
| work and the underlying copyright in the work. | | | | lawsuit, Patti alleged that Jerry structured the deal |
| For example, in the case of an artist, the | | | | with Universal is such a way that minimized the |
| community will be entitled to the market value of | | | | "remake rights" (to which she was entitled to |
| any unsold paintings in a divorce but if the painter | | | | 50%) but paid him substantial personal service |
| is famous there may be value to the other | | | | fees as writer and producer (which did not). If |
| reproduction and merchandising rights in the | | | | you do decide to separate ownership and control |
| paintings. Even where the copyright has been sold, | | | | of the copyright it is important to negotiate how |
| there may be valuable residual rights that should | | | | the managing ex-spouse will administer the asset, |
| be considered. For example, a novelist even after | | | | including defending the copyright and bringing |
| selling a book to a publisher may retain movie | | | | infringement claims, and what fiduciary duties will |
| rights and even when the movie rights are sold | | | | be owed to the other spouse. Also there should |
| may be entitled to "reserved rights" such as | | | | be provision for a buy-out in certain |
| stage and performance rights. Screenwriters who | | | | circumstances e.g. an ex-spouse dies or no longer |
| are subject to the Writers Guild of America | | | | has the ability to manage or either party wishes |
| (WGA) Theatrical and Television Basic Agreement | | | | to sell. |
| may not be the primary owner of the copyright | | | | Whatever method of division of copyright is |
| in their scripts which are deemed "works for hire" | | | | determined it is important that all the copyright |
| and are owned by the studio or production | | | | formalities for transfer are observed. Your |
| company. However, the writer may be still be | | | | attorney should pay particular attention to the |
| entitled to "separate rights" which can include | | | | Copyright Act's provisions regarding termination of |
| stage, publication, series and sequel rights | | | | transfers, reversions and renewals. Any transfers |
| depending on the terms of the writers negotiated | | | | or assignments should be in writing and it is wise |
| contract. Given the complexity of characterizing | | | | to register the copyright transfer or assignment |
| and valuation issues, in many cases it is a good | | | | at the Copyright Office. |
| idea to retain an experienced entertainment | | | | |