A Right To Copy - Is Copyright Relationship Property?

The creation of an original work often gives its owner immense personal pride.  For some, it also provides their source of income, and these economic and personal rights are protected through the use of copyright law.  However, creative workers and copyright holders were in for a shock recently, when the High Court in Alalaakkola v Palmer [2021] NZHC 2330 ruled copyright for a set of paintings was “relationship property”, meaning copyright created during a marriage is part of the divisible property pool, and effectively up for grabs.

The decision has the potential to impact on creative workers of all types, most obviously artists.  We break down the case, its potential effects on New Zealand copyright, and what it means for you, below.

Legal Position

Although intangible, copyright has long been understood in law to be a form of property.  The intention of the Copyright Act 1994 (CA) is to provide copyright owners with an exclusive right to original works.  However this exclusivity provided by the CA runs against the Property (Relationships) Act 1976 (PRA), which states that all property acquired during a marriage is considered “relationship property”, to be divided equally between both spouses, except in extraordinary circumstances. So, there are two questions to consider:

1. whether copyright created during the course of the marriage could be considered “relationship property”; and

2. if it is relationship property, whether that copyright can potentially be transferred from the creator, to the opposing spouse, as part of a division of relationship property under the PRA.

Case Study - Alalaakkola v Palmer [2021] NZHC 2330

In Alalaakkola v Palmer, Finnish-born artist Sirpa Alalaakkola separated from her husband Paul Palmer after 20 years of marriage.  In that time, Ms Alalaakkola created a vast number of paintings, some of which Mr Palmer took as “leverage” during the breakup.  Mr Palmer wanted ownership and copyright for the paintings, to be able to reproduce prints of them for sale.

The Family Court was initially reluctant to split the copyright of the paintings.  The Judge considered that the creation of each painting relied solely on Ms Alalaakkola’s personal skill, which was something separate to the relationship, and hence not relationship property.  However on appeal, the High Court Judge considered the proper focus (through the PRA) should be on the property created, as opposed to the skillset that created it.

The High Court decision effectively ruled that copyright was a part of the relationship property pool.  The case is now back before the Family Court to decide who gets what, but there are several follow on concerns - the obvious one being how does this decision affect the current, and future values of the copyrighted works, and other works created by the same creator?

Discussion amongst copyright and intellectual property experts have pointed out that creators have other rights, such as moral rights, as a means of protecting the commercial and reputational value of their works.  However, creators who wish to avoid this problem entirely will want to consider specifically accounting for copyright division in their relationship property agreements, or via other such legal mechanisms.

Andrew is a Solicitor in our Dispute Resolution Team and can be contacted on 07 958 7447.