Dividing Digital Assets in Divorce

A digital asset can be anything from a social media account to a blog, to an iTunes account.  It can even include Bitcoin and digital storage. Does a Facebook page have a value? Does a series of YouTube teaching videos? What about domain names?

The issues surrounding digital assets were explored by Carl Murway of Cleveland, Ohio and Melanie Rickart of Indianapolis, Indiana in their program at the ABA Family Law Conference in Bermuda on May 10, 2014.  Like any cutting-edge program, a lot of questions were raised.  Among the questions asked is whether the assets are owned, are they subject to division, and can they be valued.  Because there is very little law on this subject, the courts may look to theories which are usually applied when allocating comparable ephemeral property.

Some of these “properties” can be divided using the models used when a court divides intellectual property.  Others cannot be divided at all, but one spouse can buy-out the other, or the income stream can be divided with post-separation efforts factored into a decrease of the shared income stream over time.

Many sites like Facebook prohibit their customers from transferring or allowing access to an individual’s page, but this should not bar a court from coming up with an equitable remedy to divide, allocate, or value these assets.  The arguments of preemption in the fields of patents, copyrights, and trademarks have not prevented courts from dividing these assets in a divorce.

The rise in popularity of digital assets may outpace the ability of the court’s and the law to determine how to divide them.  It is up to practitioners to identify these assets and start proposing practical and feasible solutions to bench officers so that all the marital property is properly valued and divided.

– Jennie Riemer, Associate, Walzer Melcher, LLP

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