Judicial Precedent: Woman to Receive Rights to Company and Patent Registered in Husband's Brother's Name
The court ruled that despite the formal registration in the husband's brother's name, both brothers were equal partners in the technology company and the patent it developed, and therefore the rights will be included in the division of property between the spouses.
The Family Court in Tel Aviv ruled this week in an exceptional manner that a woman will receive, as part of divorce proceedings, shares in a company and a patent registered in the name of her husband's brother. This comes after it was determined that the husband and his brother attempted to conceal that they held the rights equally.
The dispute in the legal proceedings concerned the question of the husband's rights in the company and the patent developed by the company, which are registered in his brother's name. The woman, represented by attorneys Roi Sidi and Aviad Shanon, argued that half of the rights in the company belong to her husband and therefore to the joint property accumulated by the couple. The woman claimed that the brothers are the fourth generation of a well-known family of contractors and that at the beginning of their life together, the brothers were co-owners of another company in which the husband was registered as the sole shareholder. In 2018, they established the current company, in which the brother was registered as the sole shareholder. Therefore, it was argued that the brothers operate using this method where each time the shares are held by a different brother. But in practice, they work and manage and are effectively equal partners. Within this company, they invented patents for a unique technology that shortens project timelines by 30%.
The brother claimed he was caught in the middle of the couple's dispute
The husband claimed that his brother is the sole owner of the company and that he employs him as an employee. The brother also claimed that he is the sole owner of the company. The brother argued that the husband takes an active part in the company and he trusts him and even signs in his name, but this does not grant rights to his brother. He further claimed that he was caught in the middle of the couple's dispute and threatened to harm the rights registered in the company.
The woman presented contracts between the brothers according to which the husband invented the patent and is the shareholder, he withdraws funds from the company beyond the monthly salary, he controls the company, is in contact with the accountant, and boasted to an operative hired by the woman that he is the owner of the company.
Judge Tzipi Cohen-Avitan ruled this week that the company and the patent belong half to the husband:
"I have reached the conclusion that this is a family business in every respect, and that the defendants have equal rights in the companies and the patent, regardless of the formal registration of the rights."
The judge found the testimonies of the husband and the brother to be biased, contradictory, and evasive, and they did not make a credible impression on her. The judge ruled that the brother knows nothing about the management of funds in the company, data that should be within personal knowledge as the sole owner, especially when it is a one-man company. It was further determined that the image the brothers present is intended to serve a specific purpose and does not reflect reality. The husband and his brother were ordered to pay 100,000 shekels in legal costs.
