When it comes to dividing property after a divorce, most people think of apartments, cars, or bank accounts. But modern business has long gone beyond just “tangible” assets. A brand, copyright, trademark, packaging design, or industrial design can be worth much more than real estate. And it is around such assets that more and more lawsuits are arising today.
One of the illustrative cases was recently considered by the Supreme Court. For years, a former spouses jointly developed a business for the production and sale of seeds, created brands, and registered intellectual property objects. However, after the conflict, the rights to trademarks and industrial designs were transferred to the daughter without the husband’s consent. The lawsuit lasted several years and became an important precedent for the entire sphere of intellectual property in family relations.
What was the conflict?
In 2019, a man went to court to invalidate agreements on the transfer of property rights to trademarks and industrial designs, which were registered by his ex-wife to their daughter. According to the plaintiff, all these objects were created during the marriage to develop a joint business, and therefore are the joint property of the spouses.
The problem was that the registration of trademarks was formally carried out only for the wife. This is what is often used in such conflicts: one of the partners believes that if the certificate is registered in his name, then he can dispose of the rights alone. However, courts are increasingly emphasizing that registration itself does not mean that the rights are not the joint property of the spouses.
The man argued that he did not give written consent to the transfer of rights to his daughter, and therefore such agreements violate his property rights. He also requested that the entries in the state registers about the new owner of trademarks and industrial designs be canceled.
What the court decided
The court of first instance partially satisfied the claim and declared the transfer agreements invalid. The court of appeal went further and canceled the state registration of rights for the new owner – the daughter of the spouses. However, the case reached the Supreme Court, which drew attention to an important nuance: it is necessary to establish whether the new owner was a bona fide acquirer of rights.
The very concept of “bona fide acquirer” became key in this case. The Supreme Court noted that a contract concluded by one of the spouses without the consent of the other can be declared invalid only when the other party knew or could not have been unaware of the lack of such consent.
After a new hearing, the court of appeal established that the daughter was well aware of the conflict between the parents and the legal disputes regarding the division of property. Moreover, she was aware that the rights to trademarks and industrial designs were created within the framework of the spouses’ joint business. Because of this, the court concluded that she could not be considered a bona fide acquirer.
As a result, the courts finally confirmed the invalidity of the agreements and canceled the state registration of the rights to trademarks and industrial designs under the new owner. The Supreme Court actually confirmed an important legal position: intellectual property rights created during marriage can be the joint property of the spouses (and therefore subject to division).
Why this case is important for business
This case shows that intellectual property in family disputes is of the same importance as any other property. A trademark can be one of the most valuable (including financially) assets of a company, especially if the brand is already recognizable in the market.
The case can also be considered a warning for entrepreneurs who run a family business. Very often, one of the spouses formally registers a brand for himself, without thinking about the legal consequences. But in the event of a conflict, this does not guarantee sole control over the rights.
Separately, it is worth paying attention to the court’s position on state registration. The court directly stated: it is not enough to simply declare the contract invalid if the entries in the register remain valid. That is why the registration itself was canceled. This is an important practical point for all disputes in the field of intellectual property.
In fact, the courts have confirmed several important things:
- property rights to trademarks can be the joint joint property of spouses;
- the transfer of such rights without the consent of the other spouse can be appealed;
- even family ties do not protect the new owner if he knew about the violation;
- entries in state registers can also be canceled due to the illegal transfer of rights.
Judicial practice is increasingly actively recognizing intellectual property as a full-fledged property asset in family legal relations. A brand, trademark or industrial design can be divided between spouses, just like real estate or corporate rights.
This case once again shows how important it is to properly formalize intellectual property rights, especially when a business is created during marriage or with the participation of several family members. Sometimes one incorrectly formalized transfer of rights can lead to years of litigation dispute and loss of control over the brand.
If you need advice on trademark registration, brand rights, transfer of property rights or intellectual property protection – contact our law firm. We will help protect your business and avoid risks before a dispute arises.
copyright / intellectual property / joint property of spouses / trademark
