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The Brief: I Do. Wait, What Did I Do?

Spring and, even with the COVID craziness, thoughts may turn to love and marriage. Many traditional wedding vows note that a marriage shouldn’t be entered into lightly or unadvisedly. That’s great advice, but it’s given too late: that is, while you’re standing there in front of friends and family, sealing the deal. As unromantic as it sounds, for anyone but especially for creative professionals, getting married unadvisedly, i.e., without consulting your lawyer first, is spectacularly unwise. If you are a creative professional, then marriage (or civil unions/domestic partnerships, depending on your state’s laws) will likely affect you in ways you never dreamed of.

As a creative pro, you create intellectual property when you create your art: you make copyrights. When a creative work is made, fixed in a tangible (including digital) medium, the copyright automatically comes into being. The initial owner of the copyright is usually the creator who made the work. There are exceptions but, generally speaking, self-employed artists are the initial copyright owner of the work they create. You make art and, boom, you make and own its copyright.

Copyrights are assets. They are your property (there is a reason copyright, trademarks, etc., are called intellectual property). They have value separate from the art-object itself. You can buy a painting, but that does not mean you own the painting’s copyright [1]. Copyrights can be bought and sold all on their own, separate from the art-object, too. The exclusive rights associated with copyright, like to reproduce a work, can be licensed to others, creative revenue for the owner, and value for the copyright itself. In short, copyrights are valuable assets, just like a car or a house.

So, what does this have to do with marriage? Well, because copyrights are property, they are like any asset acquired during a marriage and, if you split up, they can become part of the calculations for spousal support, child support, or even be a part of the actual division of assets.

In a community-property state, virtually all assets acquired (or created) during a marriage must be split 50-50 at divorce [2]. Roughly speaking, this means adding up the value of all the assets in the marriage and dividing by 2. In community property states except for California (where copyrights still matter, but differently, we’ll get to that in a minute), the present value of your copyrights will be included in the division of property math at divorce and also may affect spousal support and child support [3]. 

As a massively simplified example: imagine you created only 2 copyrights during your marriage and they are valued at $5,000 and $45,000; your soon-to-be-ex gets half that total value, that is, $5K + $45K = $50k ÷ 2 = $25,000 [4]. Get out your checkbook.

Think about how many copyrights you create in just a month or a year. Yup, we’re talking a ton of potential value. Just determining the value of the copyrights is going to be costly. You can’t go into court and say They’re worthless! and expect that to fly. Nope, you will need to hire experts to determine the value, and it is likely your soon-to-be-ex will as well, adding to the costs and the legal fees as this is all hashed out.

As if that isn’t bad enough, even more concerning is that if at the time of the split, you get revenue from the copyrights (residuals, license fees, etc.), your ex may also be entitled to a share of that revenue. This may be true even for future revenue, like licenses created after the divorce, as long as the copyrights were created during the marriage [5]!

Turning back to California, things here are even worse for the creator-spouse: not only does the non-creator-spouse get the (ahem) gift bag described already, the state courts have decided that, at the moment of the copyright’s creation by the creator-spouse, the non-creator-spouse automatically owns an undivided half, magically becoming the joint owner of the copyright. [6] 

What’s the big deal with that? Well, lots (including that I think that is contrary to federal law) but, practically speaking, it means that, even without divorce, the creator-spouse loses control over her/his work. The non-creator spouse in California can sell or bequeath his/her half interest in the work to anyone, without the creator-spouse’s permission. S/he can also license the work to anyone (assuming that the license is otherwise legal), again, without the creator-spouse’s approval; the only requirement is that revenues must be (equally) shared.

The final California insult? At divorce, if you are the creator-spouse, you’re going to have to negotiate ownership with your soon-to-be-ex. Ouch. If you don’t have sufficient other assets for a straight buy-out, then you’ll have to agree to transfer half-shares to each other, so that each of you ends up owning the whole copyright for (likely) half of the copyrights created during the marriage. In other words, you lose ownership of some of your work.

Luckily, most states are not community-property states. However, even under their laws, the value of your copyrights may significantly affect any financial settlements in your divorce.

You can avoid these issues by getting a prenuptial agreement that includes provisions to keep copyrights as separate property and describes how revenues related to them will be handled, in the event of a split. If you are already married, you can still have such an agreement drafted (a postnup) and executed by you and your spouse. Consult with your attorney for this, of course. I highly suggest finding one who does primarily family law and who either understands copyright law or who will collaborate with someone who does.

While it might not seem romantic to plan for divorce, I think it is. Getting a prenup is like saying to each other “I love you enough to make sure that, even if everything goes to hell, I won’t hurt you.”

[1] Unless you bought that too, and that transfer has to be in a signed writing.
[2] There are some exceptions, depending on the state.
[3] I’m not getting into the support issues here as they are really complex.
[4] See, e.g., Berry v. Berry, 277 P. 3d 968 (D. Hawaii 2012).
[5] See, e.g., Rodrigue v. Rodrigue, 218 F.3d 432, 443 (5th Cir. 2000).
[6] In re Marriage of Worth, 195 Cal App. 3d 768, 241 Cal. Rptr. 135 (1987), still the controlling case in California.

 

©2020 Leslie Burns

Leslie Burns

Leslie Burns became a lawyer (licensed in California) after a career as a commercial photographers’ rep and consultant. Not surprisingly, her San Diego-based legal practice is centered on artists, especially photographers, whom she helps with copyright, small business, and other legal issues arising in their lives. She believes strongly in preventive and mindful lawyering, understanding that the best (and cheapest!) kind of legal help is the kind that prevents harm later. Learn more at Burns the Attorney or follow her on Twitter @burnsthelawyer.

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