Property, intangible

5 responses to “Patents and Divorce”

1. Dan Ballard

   May 6, 2013 at 11:19 am

   I think that a patent procured by an inventor when married in a community property state is presumptively owned the community and that, upon dissolution, the state court can:
   (1) award full title of the patent to either spouse,
   (2) deem both spouses owners of the patent as joint tenants, each having an equal, undivided interest in the patent [which continues the parties’ pre-dissolution interests in the patent],
   (3) deem both spouses owners of the patent as tenants in common, each having an ownership interest in whatever percentage the court believes just, AND, regardless of the parties’ ownership interest in the patent,
   (4) allocate between the spouses a just distribution of the proceeds earned by the patent post-dissolution.

   I read the divorce decree in this case as [implicitly] awarding both spouses ownership of the patent as joint tenants AND [expressly] allocating a distribution of the proceeds earned by the patent 60% to the wife and 40% to the husband [see paragraphs 13(D), 14, 16(B), 17(B)(4), 17(C)]. I don’t think the two awards are incompatible. As a consequence, both of these former spouses, as joint owners of the patent, must be named plaintiffs in any case seeking to enforce the patent.

   There is a good argument, however, that under Hisquierdo v. Hisquierdo, 439 US 572, 581-82 (1979) a patent procured by an inventor when married in a community property state is NOT owned by the community but rather by the inventor. The rationale being that state community property law as applied to patents conflicts with the federal patent law principle that the first inventor to file an application to patent an invention is the person entitled to own that patent [not the artificial, state-law-created “community” that arises when two people marry].

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2. Pamela Chestek

   May 6, 2013 at 11:51 am

   You may be right, but that wasn’t how the court decided the question. The ownership of a patent can only be transferred by an instrument in writing or by operation of law. The court stated that in Florida, a patent is personal property that may be subject to equitable distribution when the inventor and his or her spouse dissolve the marriage and based its decision on a writing, the divorce settlement. I don’t see that the document clearly expresses a transfer of the legal ownership of the patent; in fact I see just the opposite, whether intentional or not. Your basis is that the patent would be co-owned by by virtue of the operation of community property law, which may be a good theory but not one the court relied on.

   I didn’t note in the post that the reason the problem case to the defendant’s attention was that the wife filed a lawsuit in state court alleging that her ex-husband violated the divorce decree by filing the patent infringement lawsuit. So now no lawsuit and therefore no money for her, but perhaps there’s a bigger move in play. There was no discussion of why the defendant company just happened to have the same surname as the plaintiff; I imagine there’s more of a story here.

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3. Pamela Chestek

   May 6, 2013 at 12:02 pm

   Incidentally, too, the preemption theory in Hisquierdo v. Hisquierdo was discussed at length in the copyright case I previously covered.

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4. Dan Ballard

   May 6, 2013 at 12:52 pm

   I must be missing something.

   The patents procured by the inventor husband while married were owned right from the get-go by the community [not the husband] that was formed by the parties’ marriage [by operation of the Florida community property law cited by the district court and supported by the holding in Enovsys]. See also para. 13(D) of the state court divorce decree [“The Court finds that the primary assets of the marriage are certain patents.”]. When the state court divvied up the community’s assets I agree it did not expressly transfer to either spouse full title to those patents. Absent an express award to the husband of the wife’s ownership interest in the patents, she retained her interest after the community was dissolved. As the district court put it, “the Divorce Settlement reinforces Ms. Taylor’s ownership interest in the Patent.” Her ownership interest in the patents, once the community was dissolved, became – automatically – a joint tenancy [which is the same interest she owned while married]. Again, the state court did not award title to the patents to either spouse [so there never was ANY ownership transfer of the patents] but, instead, made clear that it “is in the best interest of the parties to put the patents into production as soon as possible to ensure a steady viable income stream.” See para. 17(B)(4)(d). All the state court did, properly, was to re-allocate the revenue earned from the patents from the joint tenancy, default 50-50 split rule to a 60-40 split in favor of the wife. The state court did not take away the wife’s ownership interest in the patents. And because it didn’t she must join her patent co-owner in any lawsuit to enforce their jointly owned patent.

   It would have been better for the two courts, or at least one, to expressly note that the wife’s ownership in the patents was not changed when the community dissolved. But my reading of both rulings is that both took that fact as granted.

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5. Pamela Chestek

   May 6, 2013 at 1:34 pm

   I would agree with your reasoning except you’re making a leap I’m not willing to make (perhaps because I’m not a divorce lawyer), which is that in Florida an asset that is acquired during a marriage is co-owned in title, too. We all own a lot of assets and liabilities individually that we acquired during a marriage, like cars and retirement accounts and trust funds and credit card debts. They are subject to equitable distribution in a divorce but that doesn’t mean that the spouse also had legal title to (or responsibility for) them.

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