Trademarks and Divorce

Trademarks and divorce intersect when intellectual property created during the marriage becomes subject to division, potentially impacting business ownership and future revenue streams.

When couples build a life together, they often build more than a home—they may also build a business. In many cases, that business carries a brand name, trademark, or reputation that represents years of shared effort. But what happens when a divorce places that intellectual property on the negotiating table?

Trademarks and branding can be some of the most valuable assets in a family business, and dividing them is rarely straightforward. Here’s what couples need to know when a name carries as much weight as the business itself.

Understanding Trademarks in Divorce

A trademark protects a brand name, logo, slogan, or design that identifies goods or services. If your family business has a registered trademark, it is considered intellectual property (IP) under the law. In a divorce, trademarks are typically treated as marital assets when:

• They were created during the marriage.
• They were jointly used in the operation of the business.
• Both spouses contributed to the goodwill or reputation associated with the brand.

If the trademark existed before the marriage and was kept separate, it may be treated as separate property—unless marital resources were used to grow or enhance it.

Valuing a Trademark or Brand in Divorce

Unlike physical property, trademarks don’t come with a clear price tag. Valuation requires assessing:

• Goodwill and reputation – How well-known and respected the brand is.
• Revenue and profits – How much the trademark contributes to business earnings.
• Licensing potential – Whether the name can be franchised or licensed.
• Market position – How competitive the brand is in its industry.

Often, courts rely on intellectual property experts to determine the fair market value of a business name or trademark during divorce proceedings.

Division Options for Trademarks and Brands

When a family business has a trademarked name, divorcing spouses may face several paths:

1. One Spouse Buys Out the Other
   • The spouse who is more actively involved in running the business may purchase the other spouse’s interest in the trademark or overall business.
2. Shared Ownership or Licensing
   • Some couples agree to co-own the trademark or create a licensing agreement that allows both to benefit financially while one manages operations.
3. Rebranding
   • If the dispute over the name is too great, the business may rebrand entirely, leaving the original trademark behind or dissolving it.
4. Court-Ordered Division
   • If spouses cannot agree, a judge may order a division based on valuation, which often results in one spouse retaining the rights and compensating the other financially.

Emotional and Practical Challenges

Trademarks often carry more than monetary value—they carry identity. A family name in a brand can make the process even more personal. Questions arise like:

• Who gets to keep using the family name?
• Can both spouses run competing businesses under similar branding?
• What happens if one spouse’s continued use harms the reputation of the name?

These emotional factors can intensify disputes and make mediation or collaborative divorce a more attractive solution.

Protecting Your Business Name Before and During Marriage

Couples who own businesses together should think about brand protection early. Steps include:

• Registering trademarks properly under one or both names.
• Creating business agreements that clarify ownership shares.
• Considering prenuptial or postnuptial agreements that specify how intellectual property will be handled in case of divorce.

When love and business intersect, divorce can untangle more than personal ties—it can unravel a brand. Trademarks and branding are not just logos or words; they are the embodiment of reputation, trust, and legacy. Whether through buyouts, licensing, or rebranding, couples must balance financial fairness with emotional realities.

FAQs on Trademarks and Divorce

1. Is a trademark considered marital property in a divorce?

Yes, in most cases. If a trademark or brand was created or developed during the marriage, it is usually treated as marital property and subject to division. If it existed before the marriage and was not enhanced with marital resources, it may be considered separate property.

2. What happens if both spouses want to keep the business name?

If both spouses want rights to the trademark, they may negotiate shared ownership, create a licensing arrangement, or the court may decide that one spouse retains ownership while compensating the other financially. In rare cases, the court may order a rebrand.

3. Can my ex still use our family name in a business after divorce?

It depends. If the family name is trademarked and one spouse is granted exclusive ownership, the other cannot legally use it for business purposes. However, if no trademark protections are in place, both may be able to use the name unless restricted by a settlement agreement.

4. How do courts value a trademark in divorce?

Courts typically rely on expert appraisals that consider brand recognition, goodwill, revenue, licensing potential, and market position. This ensures a fair valuation of the intellectual property.

5. Can we sell the trademark and split the proceeds?

Yes. Some divorcing couples choose to sell the trademark, business, or brand name and divide the proceeds instead of one spouse buying out the other.

6. What if my ex damages the reputation of our shared brand after the divorce?

If both spouses retain rights, reputation disputes can arise. In these cases, licensing agreements or court-ordered restrictions can help prevent one spouse from misusing the brand or harming its value.

7. How can couples protect trademarks before divorce becomes an issue?

Register trademarks under clear ownership, create business agreements that outline IP rights, and consider prenuptial or postnuptial agreements that specify what happens to intellectual property if the marriage ends.