Peculiarities of legal regime of intellectual property of spouses

Ownership is one of the fundamental rights of citizens, which is protected by the state.    Living in the material world, people routinely face need to use particular things. A thing, if it is a product of human activity, does not exist by itself. Each thing, whether it is a car or newspaper belongs to a particular person.  Due to necessity of regulation of relationship between people in the sphere of use of property, property law emerged and shaped itself, the central object of which is to define and exploit property rights.

Laws of the Russian Federation prescribes three forms of ownership – private, state and municipal.  Subjects of ownership right (holders) can be individuals, legal persons, the state represented by authorities and municipalities.  Besides, one and the same thing cannot be the object of various forms of ownership. So, the thing that belongs to a citizen, is not subject to ownership rights of the state.  So ownership right of the government, by transferring property to an individual, for example, under privatization contract, shall be deemed forfeited.

Ownership implies the possibility of disposal, use and possession.

Possession of a thing means the possibility of holding things in private ownership.

Disposal means a possibility to change, transfer, encumber and manage it.

The right of use is implemented through the possibility of deriving benefit and other useful properties from a thing.

Ownership applies not only to the objects of the material world. Fast development of the institute of intellectual property started in the nineteenth century.

When considering legal aspects of ownership, one should distinguish two different types of its properties: proprietary and intellectual.

Intellectual property (in Latin “intcllectlis” – intellect) is a combination of legal relationship relating to ownership, disposal and use of products of intellectual activity, exclusive right to the results of creative activity and means of individualization.

Intellectual property rights shall apply to the results of intellectual activity (intellectual property). Such rights shall include exclusive right, constituting proprietary right, and in certain cases, also personal non-proprietary and other rights¹.

The exclusive right to the result of intellectual activity, created by author of creative work, initially belongs to him².

As a rule, if the object of intellectual property or thing of material world belongs to one person, his proprietary right may not be restricted other than by direct reference to the law, but pursuant to civil law a thing may belong to several persons and then the right of one owner may be restricted by the rights of the other co-owner.

In respect of intellectual property the rights to the results of intellectual activity may belong to several persons if they are co-authors of creative work. Pursuant to the Laws of the Russian Federation the co-authors shall have exclusive rights in respect of the object created by them.

There are two types of property ownership by several persons – joint and participatory share ownership. The differences between these two types of ownership is that in case of joint property owners have equal shares without apportionment of participatory share. In case of participatory share ownership shares may be different and the use of shares may be determined by the agreement between co-owners or pursuant to court ruling.

In relation to intellectual property, the Civil code prescribes only joint property, which implies equality of the owners. Whereas a thing can be divided between co-owners into equal or different shares.

Joint property, without determining the shares, is possible subject to direct instruction of the law. One of  such cases is joint ownership by spouses in respect of property acquired in the course of marriage.

Joint property of spouses may include any property (both particular things and property rights), not withdrawn from commerce.

Pursuant to Family law joint ownership applies to the following types of property:

• each spouse income from employment, business and intellectual activity results;
• received pensions, allowances and other cash payments not characterized by special purpose (the amount of financial assistance, amounts paid as compensation in case of disability due to injury or other harm);
• purchased at the expense joint income of spouses real and personal property, securities, shares, deposits, equity shares deposited to credit institutions or other commercial organizations, and any other property purchased by spouses in the course of marriage, property, irrespective of the fact in whose name of the spouse the money funds are deposited³.

Please note that co-ownership includes only income from intellectual property, but the result of intellectual activity created by a spouse shall not be deemed the object of joint property acquired I the course of marriage.

Thus, intellectual property, which is the result of creative activity of one of the spouses may not be treated  as jointly property. If in the course of marriage one of the spouses became the author of the utility model, the patent authorizing the disposal of the invention will belong only to him, but income derived from license contracts shall be deemed joint.

Special regime of intellectual property created by one of the spouses during marriage, is enforced due to the fact that civil laws apply to the author exclusive right to the result of creative work. Joint ownership of the exclusive right is only possible in case of co-authorship of spouses.

Persons who have not made a personal creative contribution to the creation of such result, including those who provided to the author only technical, advisory, organizational or material assistance or help or only assisted with registering the rights with regard to such result or its use shall not be treated as co-authors of the results of intellectual activity. Creation of favorable conditions for creative activity, material support in the curse of creative activity do not entail authorship to a spouse, whose activity is not connected with creation of intellectual property.

In case of disposal of joint property it is resumed that the spouses act in the interests of family, their actions are coordinated and aimed at achieving common goals. However, Family code, in order to prevent the abuse of rights and protection of property interests of spouses, states that consent of the other spouse shall be provide for conclusion of transactions in respect of property. Such consent shall be certified by notary public⁴.

When disposing intellectual property the consent for disposal or other use of exclusive rights is not required from the second spouse, since the regime of separate property of spouses applies to the result of intellectual activity.

In the case of divorce, income from the use of intellectual property will be included into the pool of jointly acquired property, whereas the result of creative work may not be shared and, in future, income generated in connection therewith will belong only to the author.

Often the spouses conduct intellectual activity and are co-authors of literary works or other creative material.

When disposing exclusive rights the spouses shall comply with civil laws regulating relations in the sphere of intellectual property. In particular, the issue of disposal of the result of creative work shall be resolved on the basis of agreement between co-authors. In the absence of such agreement, the income received from the use of results of intellectual activity, created by spouses in co-authorship, shall be distributed equally and shall be deemed jointly acquired property. Spouses shall retain the entitlement to a part of income upon divorce. In addition, if the agreement states different amounts of distributed income, this agreement will be used irrespective of equal rights of spouses to property acquired in the course of marriage.

The laws regulating the relationship between coauthors shall be deemed special, and shall be applied to the norms of family law, that determine the regime of joint ownership of spouses.

The exclusive rights on results of intellectual activity, created by one of the spouses shall be subject to the regime of disposal of property belonging to each spouse separately⁵.

Thus, in contrast to disposal of joint property of spouses, when execution of transaction is subject to the consent of the second spouse certified by notary public, the disposal of the result of intellectual activity, coordination of terms of use, generation of profits, conclusion of license agreements with the second spouse is not required unless he is co-author.

Compulsory condition for application of the regime of joint ownership of the spouses entails official marriage registration. Joint housekeeping, birth of children shall not constitute grounds for recognizing actual marital relationships as legally significant for division  of property in case of termination of such relationships.

Disputes between spouses relating to division of joint property can be predetermined by premarital agreement. Furthermore, premarital agreement may state a regime of joint ownership not only for the case of divorce, but it ay apply in the course of family life. Premarital agreement constitutes a type of civil contract.

Inclusion into the subject of the contract terms and conditions relating to property, which is in ownership of one of spouses (intellectual property), entails conversion of premarital agreement into mixed contract, which will contain elements of various contracts. Relevant provisions of the Civil code of the Russian Federation shall apply to the terms of contract regulating disposal of exclusive rights. For the spouse who is not the creator of the result of intellectual activity, acquired rights are derivative, therefore they may be subject to enforcement⁶.

The purpose of premarital agreement is to establish legal regime of spouses’ property. Furthermore, the subject may include not only existing property and property rights, but also those that will arise in future in the course of marriage. Premarital agreement may state the regime of use of joint property not only in the case of divorce, but in the course of family life. Premarital agreement can be concluded prior to the registration of marriage, and thereafter. No time restrictions for concluding premarital agreement have been set forth by the laws.

The list of terms and conditions of premarital agreement contained in the Family code of the Russian Federation is open, since the law allows to include into agreement any provisions relating to property relationship between spouses. Spouses may determine in their premarital agreement the rights and obligations regarding mutual allowances, ways of participation in incomes of each other, the order of incurring family expenses; and may determine the property to be transferred to each of the spouses in case of divorce and also include into premarital agreement any other provisions relating to property relations between spouses⁷. Thus, spouses may include into premarital agreement terms and conditions which affect exclusive rights as a form of proprietary rights of spouses.

Premarital agreement may constitute a property “code” of particular spouses, specifying in detail practically all ownership aspects of family life.

Unlike agreements on creation of results of intellectual activity and disposal of exclusive rights, premarital agreement is intended not for exercising the rights relating to results of intellectual activity, but for determination of legal regime of objects, owned by spouses.

Spouses are free to determine the terms and conditions that they are willing to include into their agreement, in compliance with restrictions stated by the laws.

Some provisions regarding regulation of rights to results of intellectual activity may not  be included into premarital agreement. Premarital agreement can not regulate personal non-property relations between spouses. Pursuant to the Civil code of the Russian Federation, the right to name, right of authorship, other non-property right are inalienable and non-transferable by any other way⁸, so they can belong only to the spouse – author.

It is prohibited to include provision into premarital agreement, stating that the author of a work created in the course of marriage will be the spouse who did not participating in creation of this work or that publication of works may be performed only upon written consent of second spouse.

At the same time, with regard to income from the use of intellectual property objects, it is possible to determine which of the spouses will be entitled to such income in the course of marriage and terms of distribution in the case of divorce. Spouses may stipulate in premarital agreement terms and conditions mutual allowances. For example, it is possible to set forth that the spouse shall be entitled in case of divorce to financial support in the form of all income from the results of intellectual activity received by former spouse, or specific part thereof.

Taking into account the aforesaid, when determining the right of each spouse with regard to income from the use of intellectual property the following shall be taken into account:

Intellectual property has been recorded in the course of marriage, registered in specified order.

If the spouses are co-authors, their relationships shall be regulated by the agreement.

Intellectual property shall be subject to the regime of separate property of spouses.  Jointly acquired property includes only income derived from the use of the result of creative activity.

In respect of any property acquired in the course of marriage, including intellectual property, premarital agreement may set forth regime of possession, use and disposal.

1. Article 1226 of the Civil code of the Russian Federation.
2. Article 1228 of the Civil code of the Russian Federation.
3. Article 34 of the Family code of the Russian Federation.
4. Article 35 of the Family code of the Russian Federation.
5. Article 36 of the Family code of the Russian Federation.
6. Article 1284 of the Civil code of the Russian Federation.
7. Article 42 of the Family code of the Russian Federation.
8. Article 150 of the Civil code of the Russian Federation.