Intellectual property in matrimonial cases.

In today's economy, the drivers of business value have shifted from 'bricks and sticks (i.e., land, buildings, and equipment) to intellectual properties and other intangible assets. These intangible assets are usually not reflected in a company's financial statements and are easily overlooked. They also may also be overlooked if they are owned separately by an individual rather than by a company. Intellectual properties are a subset of intangible assets, and can often have a substantial impact on increasing revenues and reducing expenses. The matrimonial practitioner must be concerned with the following issues in valuing intangible assets such as intellectual properties:

* Definition

* Identification

* Standard of value, premise of value, and valuation date

* Sources of information

* Appropriate methods of valuation

DEFINITION OF INTANGIBLE ASSETS VS. INTELLECTUAL PROPERTY

The main difference between a tangible asset and an intangible asset is that the value of the tangible asset is derived by its physical nature (e.g., its physical existence and substantial form, and its ability to be touched and seen).

An intangible asset, on the other hand, is not physical in nature. It can be broadly defined as something that has value, but can't be touched. However, there should be physical evidence of the existence of an intangible asset (e.g., a contract, a license, a customer list, etc.) An intangible asset has value because it often enhances the value of other assets. For example, intangible assets such as computer programs may enhance the value of the tangible computer hardware. A company's intangible assets must integrate with its tangible assets in order for the intangible assets to create business entity value. However, the intangible assets may have stand alone value based on the company's ability to (1) lease or license the intangible assets to outside parties or (2) use the intangible assets in a joint venture with another company. In addition, these intangible assets may be used defensively and withheld from the market to reduce competitive pressures on the company.

Intellectual properties are a specialized classification of intangible assets, and reflect the general characteristics of intangible assets mentioned above. In addition, intellectual properties:

* Enjoy special legal recognition and protection, which provides motivation and protection for intellectual property innovators and creators.

* Are created by human intellectual effort, which can be attributed and identified to specific individual(s).

* Are often registered under specific federal and state statutes.

There are five general categories of intellectual properties. Each is presented below, along with relevant sources of protection:

1. Marketing-related, such as trademarks and service marks. (Lanham Act, U.S. Code Title 15)

2. Technology-related, such as certain types of patents. (U.S. Code Section 101)

3. Artistic-related, such as literary and musical copyrights. (Federal Copyright Act)

4. Data processing-related, such as computer software copyrights and computer chip masks and masters. (Federal copyright acts and Semiconductor Chip Protection Act)

5. Engineering-related, such as industrial designs and trade secrets. (Uniform Trade Secret Act)

Intellectual properties are developed mostly for commercial use, whereby the developer will (1) use the property in his business or (2) license the property for a fee. Sometimes the property is developed for future use, or, on the other hand, to keep competitors from using the intellectual property in a way that …