Tempe, Arizona · Family Law
Divorce Attorneys for Business Owners in Tempe, AZ
Desert Legal Group represents Tempe founders whose company’s real value is its intellectual property and the agreements that control it.
Key Takeaways
- A company or invention developed during the marriage is presumed community property under A.R.S. § 25-211.
- Where IP was created during the marriage, the community claim can survive even if the entity holding it was formed later.
- Assigning or licensing IP mid-case can breach the A.R.S. § 25-315 injunction if it is not routine.
Overview
Tempe produces a particular kind of business. Small headcount, modest revenue, and a balance sheet that badly understates what the company is because the value is in the code, the patent, the brand or the licence.
Dividing that is unlike dividing a shop with stock and a till. Call for a free consultation.
Is it community
When Was It Created, and by Whom
Under A.R.S. § 25-211 property acquired during the marriage is presumed community, and intellectual property is property. Work created during the marriage generally falls in, whoever wrote it and whoever is named as inventor or author.
A.R.S. § 25-213 protects what was owned before the marriage or received by gift or inheritance, with its rents, issues and profits, but the timing question is genuinely difficult with IP because creation is a process rather than a date.
A recurring complication is that the entity was formed after the work began. Incorporating in year three does not reset the clock on IP developed in year one, and a founder who assumes the company’s formation date controls the analysis is likely to be wrong.
Division then runs through A.R.S. § 25-318, equitably and not necessarily in kind.
IP and agreements
Read the Assignment and Licence Documents First
Before anyone values anything, establish who actually owns the IP. Founders regularly discover that assignments to the company were never properly executed, that a co-founder retains rights nobody remembered, or that a university or former employer has a claim arising from where the work was done.
Those questions have to be answered before a valuation means anything, and they are frequently answered badly under the pressure of a divorce because the honest answer is inconvenient for whoever is asserting the highest value.
Licences matter as much as ownership. A company whose revenue depends on one licence agreement is worth what that agreement is worth, and its termination provisions may be triggered by a change in control.
Where revenue is royalty based, the division can sensibly follow the royalty stream rather than fixing a number today, since a lump sum requires both sides to guess at a future nobody can see clearly.
The injunction
Do Not Move the IP While the Case Is Running
On filing, A.R.S. § 25-315 restrains both spouses from transferring, encumbering, concealing, selling or otherwise disposing of community property, with an exception for the usual course of business.
Ordinary licensing on your standard terms to ordinary customers is trading. Assigning the IP into a new entity, granting an exclusive licence, pledging it as security, or letting a registration lapse are not, and the last of those can be characterised as dissipation just as readily as a transfer.
Founders sometimes take advice from corporate counsel who is thinking about the company and not about the injunction. The two sets of advice can conflict, and the injunction carries the force of a signed superior court order enforceable by contempt.
If a funding round or a licensing deal genuinely cannot wait, that is a reason to seek written consent or a court order quickly, not a reason to proceed and explain later.
You Can Trust Our Tempe Business Divorce Attorneys
IP-heavy cases turn on ownership documents that predate the dispute. We would rather find the problems in those documents ourselves than have opposing counsel find them.
Bring your assignments, your cap table and your licence agreements. The consultation is free.
