Laws regarding ownership of marital assets vary from country to country and in the US from state to state. In most jurisdictions assets that are acquired during a marriage – including intangible assets, such as patents – are marital assets subject to distribution between the couple in the event of a divorce.
If an inventor is granted or otherwise obtains a patent during the course of a marriage, his/her name may be the one on the patent but if the laws in the country or state in which the couple got divorced call for a percentage distribution of marital property, he or she may not have the right to enforce the patent against infringers without the cooperation of his/her former spouse.
It is a principle of patent law in the United States that you cannot bring a legal action for patent infringement unless you own all rights under the patent. If multiple parties share ownership under a patent, one owner alone does not have “standing” to enforce the patent in court without the involvement/consent of the other owners. In the event of a divorce, a division in ownership of a patent (as opposed to a split of the monetary value) will affect legal title to the patent, and therefore who is legally entitled to bring suit to enforce the patent.
The problems this can create for patent owners are highlighted by a 2013 case, Taylor v. Taylor Made Plastics which was affirmed on appeal in May, 2014.
James Taylor (not the singer) and Mary Taylor were married in 1987. Over the course of their marriage, James was granted several patents for plastic pieces used in storm drains. In particular, he was granted US Patent5,806,566, “Storm drainage conduit plug and sealing band therefor,” on September 15, 1998. The couple subsequently divorced, and the court ordered that proceeds “from the production of the patents” be split with 60% going to Mary and 40% going to James.
In 2012 James filed a lawsuit against Taylor Made Plastics alleging patent infringement of the ‘566 patent. The defendant filed a motion to dismiss, claiming that the plaintiff did not have standing to bring a patent lawsuit because his ex-wife was not joined to the complaint.
In James’ initial response to the motion to dismiss, he alleged that split of proceeds determined by the divorce court proceedings did not grant title to Mary Taylor. The district court ruling by Judge Elizabeth Kovachevich of the US District Court in Tampa, Florida rejected this contention and found that under Florida law Mary was a co-owner of the patent. She granted the motion to dismiss.
James apparently conceded that Mary was a co-owner of the patent because he did not raise this issue on appeal, so the appeals court did not consider this question. On appeal he argued that Mary either joined the suit as a co-plaintiff because she participated in mediation, or that she waived her participation in the suit based on agreement.
The appeals court held that James did not bring sufficient evidence to prove either of those claims. The court reinforced the principle that the long-established rule for bringing a suit for patent infringement is that all co-owners of the patent be joined as plaintiffs:
The long-established rule is that a suit for patent infringement must join all co-owners of the patent as plaintiffs. Waterman v. Mackenzie, 138 U.S. 252, 255 (1891). If any co-owner should refuse to join as a co-plaintiff, the suit must be dismissed for lack of standing.
The appeals court did recognize that a party is not a co-owner of a patent for standing purposes merely because he or she has a financial interest in a patent; in order to be a “co-owner” one must hold legal title to the patent.
In the event of a divorce where there are patents as part of the marital estate it is worthwhile to consult with not just a family lawyer but an intellectual property lawyer as well to avoid situations that may have unintended consequences.
