Are you married to an author, musician, actor or artist?

    Are you married to an author, musician, actor or artist? If you're considering divorce, intellectual property rights from any of their copyrights, patents or trademarks should not be overlooked in any property settlement. In California, a decision in the case of Susan and Frederick Worth established that copyright should be treated as community property and divided equally when a marriage ends.

The couple had agreed that she would be entitled to royalties from two trivia books he wrote while they were married. After their divorce, Frederick Worth filed a copyright infringement lawsuit against the Trivial Pursuit board game, claiming the company used his work as the basis for some game questions. When his former wife found out about the lawsuit, she claimed she should be entitled to half of the proceeds from any settlement. Her former spouse denied her claim, saying federal copyright law trumped the state's divorce laws.

The California courts, however, agreed with her claim. The case has set the standard for California divorce settlements involving intellectual property rights. If you're going through a divorce involving intellectual property rights, here are some steps to consider.

1.Identify the nature of the intellectual property rights that may exist.
If you're involved in divorce, it's important to identify any copyrights that you or your soon-to-be ex may hold. This is especially important for literary and music creations, which can be licensed and generate future income.

Consider an author who writes a series of books featuring a famous cartoon character. The author's spouse is entitled to 50 percent of the copyright of the books written during the marriage. But what happens after the couple divorces and the author writes new books using the same cartoon character? What if the new books are turned into television shows and movies? As part of a divorce settlement, your attorney would need to distinguish and value the cartoon character, the copyrights in the books, goodwill developed by the author and trademark rights created in the character and the series. It is likely that these values will depreciate over time.

This was the situation in the divorce of Charles M. Schulz, the creator of the comic strip "Peanuts". In a property settlement with his wife of 24 years, he agreed to pay a share of the revenues from the comic strip that would decline from 27 percent to 15 percent over 10 years. The settlement took into account that an increasing percentage of revenues would be attributed to his personal efforts after the divorce.

It is important to distinguish between the physical work and the copyright in the work. For example, in California, the spouse of an artist would be entitled to the market value of any unsold paintings. If the painter is famous, however, there may be value to reproduction and merchandising rights as well.

Even if a copyright has been sold, there may be other worth considering in the divorce settlement. For example, a novelist may sell a book to a publisher but retain movie rights. If the movie rights are sold, they may keep stage and performance rights. Screenwriters who are subject to the Writers Guild of America basic agreement may not own their script copyrights, because they may be owned by the studio or production company. However, the writer may be entitled to other rights, like stage, publication, series and sequel rights, depending on their contract. Because of the complexities of giving the rights a value, it's best to retain an experienced entertainment lawyer and accountant to help.

A search of the U.S. Copyright Office will determine if a copyright has been registered. But registration is not a requirement for protection. Plus, the search will not reveal unpublished works or exploited or foreign works. For example, a half written book or a story outline is not likely to be registered but may still have value. Discovery methods can be used to uncover copyrighted works from your spouse or interested third parties such as book or music publishers, agents, business or personal managers and accountants. In the case of a T.V. writer, you would want to examine contracts and royalty statements.

California family law requires both spouses to make a "full and accurate disclosure" of assets and liabilities. Failing to do so may result in sanctions, including awarding of the hidden assets to the spouse who didn't know about them.

2. Identify  how you want to divide the intellectual property rights in your settlement.
With copyright, the easiest solution is for one of the spouses to buy out the other's copyrights interests. The question is, how much is it worth? Value is often speculative especially with the development of new technologies.

Another solution is to equally divide the ownership and control of the copyright assets. This can be a problem for the creator, because it might impair his or her ability to sell the work. Imagine if you and your spouse own a business. If one spouse has always made the business decisions, it's hard for them to give the other spouse a say. Another solution divides ownership – the legal title and right to revenues -- between the spouses but leaves control of the copyright to the creator. Unfortunately, this can give the creator the ability to structure deals that are not advantageous to their former spouse.

Consider the case of comedian Jerry Lewis and his wife, Patti, who divorced after 35 years. In the divorce settlement, Lewis retained the rights to his community property films made during the marriage and his ex-wife was entitled to half interest in royalties in them. One of the community property films, "The Nutty Professor," was later remade by Universal Studies featuring comedian Eddy Murphy. In a lawsuit filed against her ex-husband, Patti Lewis alleged that he tried to cut her out of the remake profits, to which she was entitled to 50 percent. Instead, she alleged that , her ex-husband structured the deal so that he was paid personal service fees as writer and producer.

3. Negotiate how the assets are managed.
If you do decide to separate ownership and control of the copyright, your next step is negotiating how the managing ex-spouse will administer the asset. This includes how they will defend or pursue any copyright infringement claims and what financial duties they owe to their former spouse. There should also be a provision for a buy-out under certain circumstances, for example, if an ex-spouse dies or no longer has the ability to manage or either party wishes to sell.

4. Comply with copyright formalities.
Whatever you decide, it's important that everything you do be in writing and complies with the formalities of copyright assignments and is registered with the copyright office. Your attorney should pay particular attention to the Copyright Act’s provisions regarding termination of transfers, reversions and renewals.

Warren R. Shiell has practiced law for more than 15 years in the United Kingdom, New York and California. His firm in Beverly Hills, Calif., is devoted exclusively to family law issues. His web site is http://la-familylaw.com/.