A recent case highlights what can happen when patent rights are divided during a divorce. In James Taylor v. Taylor Made Plastics, Inc., James Taylor (no relation to the singer) acquired several patents during his marriage to ex-wife, Mary L. Taylor. During their divorce, the Taylors signed a settlement agreement subjecting their marital assets, including the patents, to equitable distribution. The agreement further stated that the proceeds from the patents were to be divided 60/40 in favor of Mary Taylor.
Approximately one year later, James Taylor filed a patent infringement lawsuit against Taylor Made Plastics, Inc. Mary Taylor did not join the infringement suit, but instead filed a Motion for Contempt and Motion for Injunctive Relief in Florida state court alleging that her ex-husband had violated their divorce settlement by filing the complaint.
Taylor Made Plastics filed the motion to dismiss the complaint, arguing that the James Taylor did not have standing because Mary Taylor, a co-owner of the patent, had not been made a party to the infringement suit. While James Taylor attempted to argue that his former wife did not have ownership rights in the patents, the court disagreed.
As it explains:
Under Florida law, properties acquired during a marriage are presumably marital assets. Further, under Florida law “a patent is personal property that may be the subject of equitable distribution when the inventor and his or her spouse dissolve their marriage.” Additionally, the Florida Supreme Court has definitively held that “a final judgment of dissolution settles all such matters as between the spouses … and acts as a bar to any action thereafter to determine such rights and obligations.” Accordingly, since the Patent was issued to the Plaintiff while he was married to Ms. Taylor, the Patent was presumably a marital asset, under Florida law, prior to the issuance of the Divorce Settlement. The Divorce Settlement merely reinforced that presumption by subjecting the Patent to equitable distribution and awarding Ms. Taylor a 60% interest in any proceeds from the Patent.
Accordingly, the court dismissed the complaint for failure to join the co-owner of the patent.
As this case highlights, intellectual property can be an important asset to consider during a divorce. When ownership rights inadvertently are split, it can result in a lack of standing and the inability to pursue infringement. For detailed advice about how IP rights can be impacted during divorce proceedings, we encourage you to contact us today by phone or email to schedule your free 30-minute consultation.
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