As prenuptial agreements become common in Asia, Espie Angelica A. de Leon discusses the importance of including IP in prenuptial contracts, highlighting legal considerations and varying practices across countries. 

The months, weeks and days leading up to their wedding are among the happiest and most exciting in the lives of an engaged couple. Eager to start a life together, the couple will be busy preparing for their altar date – checking out venues, meeting with caterers or restaurant and hotel staff, drawing up the list of people they will invite and choosing their wedding entourage, among a host of other preparatory tasks.  

For some couples, wedding preparations also include consulting lawyers for a prenuptial agreement – a prenup – a contract indicating the division of assets in case the marriage breaks down. According to an article in finews.asia, more and more couples in Asia are getting prenups. The same article reports that the number of failed marriages in the region is increasing. Take Hong Kong as an example. In 2023, it saw a 25 percent year-on-year increase in the number of divorce applications. Even mindsets are changing. Prenuptial contracts used to be shunned in Chinese society due to superstitious beliefs. Not anymore. 

While prenup agreements are becoming more common in Asia, what remains uncommon is the inclusion of intellectual property assets in the prenup – whether these are patents, copyrights, trademarks, trade secrets or other IPs owned by one or both spouses. Indeed, should IP rights be addressed in a prenuptial contract? 

“Absolutely, including IP must form an important part of the prenuptial agreements,” said Mary Wendy Duran, founding senior partner at Duran & Duran-Schulze Law in Manila. “IP often represents a significant portion of an individual’s wealth, especially for those working in creative or innovative fields. By outlining ownership of IP assets in prenuptial agreements, couples can avoid potential disputes if they separate or their marriage ends.” 

IP is often discounted, said Duran, yet it underlies an essential aspect of financial security. IP equally demands creative protection.  

Aside from the Intellectual Property Code of the Philippines, the Family Code of the Philippines also recognizes individual property rights, particularly within the context of marriage. “By explicitly including IP in prenuptial agreements, couples can establish clear boundaries and expectations regarding ownership, potential future earnings and the transfer of rights,” advised Duran. “As someone with a background in IP law and family law in the Philippines, I have observed how couples trip over the shocks of asset protection within the family, especially under the aegis of the Philippine IP Code and the Family Code of the Philippines.”  

“I think IP assets should definitely be addressed in prenuptial agreements, even if it is to say that the assets are excluded from the matrimonial pool,” agreed Anna Toh, director at Amica Law in Singapore. “reating valuable IP outside their day jobs as the line between ‘work Individuals are increasingly c’ and ‘home’ blurs and creative and monetization tools become more accessible. Activities that start off as a casual creative pursuit can quickly become commercial. So, the certainty and protection that parties want from a prenup should extend to their personal IP assets as well.” 

According to Toh, all IP assets between the couple must be addressed in the prenup contract, including business IP assets if they are entrepreneurs or have a joint business. If only one party is an entrepreneur, his or her business’s IP assets must be included as well for clarity that the assets don’t belong to them as individuals. “Social media accounts should also be included, especially if the couple has pages that they both contribute to, like pet accounts or home design pages,” she said. 

IP clauses, provisions and considerations in prenuptial agreements 

First off, a pair who’s about to say “I do” at the altar must consult experts in both family law and IP law. “Each of these fields brings unique perspectives which will help in creating a comprehensive, solid and fair prenuptial contract,” said Duran.  

Prenuptial agreements that contain IP-related matters should include clauses that address the following: 

• Indentification and valuation. Outline existing IP assets. Provide a method for determining the value of those assets. 

• Ownership and rights clause. Who will retain ownership of the IP? In what capacity? As for future creations, how will these be handled? These matters must be taken up in the prenup agreement. 

• Usage rights. The prenup contract must define how the husband and wife can utilize the IP during the marriage as well as after, in the event of a dissolution. 

• Revenue and royalties.  As for income generated from the IP, the agreement must discuss how these will be managed. 

The couple must also consider including provisions to establish the following: 

• Community property status for IP existing before marriage, 

• Distribution of IP assets jointly developed, before, during or after the marriage, 

• Co-ownership rights for work done jointly by the couple, and 

• Compensation structures for IP created before, during or after the marriage. 

Additionally, there must be considerations for confidentiality and non-compete agreements. 

“Couples should furthermore carefully document the origin of IP assets. This means that the couples should make an inventory of all their IP assets that they have prior to marriage, and in preparing their prenuptial agreement, they should also indicate the history or when the respective couples have acquired their IP assets,” Duran said. 

Further, she said the couple must be detailed in their accounting of how these IPs came to value and of these assets’ future potential.   

“Each clause should be customized to fit the unique circumstances of the couple, taking into account their professional paths and creative potential,” she noted.  

Prenups in the Philippines, Singapore, Taiwan and Malaysia 

Prenup contracts that contain IP-related matters aren’t common in the Philippines and Singapore. But since the world is now moving quickly into one with more knowledge-based economies and digital industries, addressing IP rights in a prenup agreement is becoming more important.  

“This is most specifically applicable to Generation Zs [with] most of their work output [being] in digital forms now, such as software, video editing, YouTube marketing, AI generation of bots and others. These are already considered IP assets that generate income,” Duran said. 

The same goes for couples working in entertainment, research and design. These are IP-rich industries; hence, individuals working in these spaces must also be aware of the potential value of their IP before they set their date at the altar. 

Toh agreed. “I expect the inclusion of IP assets will become increasingly common as Singapore’s economy becomes more knowledge-based and individuals grow more aware of the value of IP assets. This will be especially so for entrepreneurs and those in creative industries,” she said. 

In Taiwan, some courts believe marriage is intended for a couple to live together permanently.  

“Therefore, any pre-established conditions for divorce, such as how to allocate the assets in a prenuptial agreement, would be deemed invalid because of ethical violation,” said Nick J.C. Lan, an attorney-at-law at Tsai, Lee & Chen in Taipei. “Therefore, we suggest designating the marital property regime but not determining how to allocate the assets upon divorce. For example, if the IP owners do not want their spouses to claim ownership of their IP assets when they divorce, they can formulate an agreement adopting a separate property regime.” 

Taiwan has three types of matrimonial or marital property regimes: 

First is the statutory matrimonial property regime, which is the default regime. There is no existing matrimonial property contract between the husband and wife that stipulates otherwise. Under this regime, in principle, the property, including the IP rights of either spouse, shall be divided into property acquired before marriage and property acquired during the marriage. The property shall also be owned respectively. This means that, for example, IP rights acquired by a spouse before marriage or during marriage remain hers. 

The second type is the community property regime, where all the property and income of the husband and wife constitute common property to be owned by them in common. These shall not be managed or disposed of without the consent of both spouses unless an agreement stipulating otherwise exists. 

The third is the separate property regime, where each spouse retains ownership of his or her property.  

Couples in Taiwan choose which of these three types of matrimonial or marital property regime they will adopt. For Lan, the separate property regime provides a good solution because IP assets acquired by either spouse before or after marriage will not be subject to sharing or re-allocation when they divorce. 

“The marital property regime will apply to any assets owned by a couple. Therefore, it is not feasible to choose which kinds of IP assets shall fall into a certain type of marital property regime while other kinds do not,” said Lan. 

He added that including clauses, provisions and considerations in connection to IP in prenup agreements is not common in Taiwan. That is, unless the IP assets are very valuable. 

As for Malaysia, Jin Nee Wong, partner and co-owner at Wong Jin Nee & Teo in Kuala Lumpur, said: “Prenuptial agreements are not expressly recognized under Malaysian law and may face enforceability challenges due to public policy considerations.” 

Nevertheless, in other Asian jurisdictions like Singapore, Philippines, Hong Kong and China, prenup contracts are accepted and recognized.  

Duran believes having a prenup agreement leads to honest communications between the husband and wife with regard to financial and property expectations. For her, this lays a strong foundation for the marriage. “In doing this, the couples will have a stronger appreciation for each other and respect for their respective creative and intellectual contributions,” she said.