The art of copyright treatment in relationship breakups

Friday 14 March, 2025

Introduction 

The Supreme Court has issued its highly anticipated decision in Alalääkkölä v Palmer [2025] NZSC 9. 

This case concerns copyright in paintings by the artist Ms Alalääkkölä following separation from her former husband, Mr Palmer, after 20 years of marriage. For background see our article on the Court of Appeal’s decision Copyright in Separation – A Fine Art. The Court of Appeal held that the copyrights in artworks created during the relationship should be classified as relationship property but remain in Ms Alalääkkölä’s possession, with a compensatory adjustment from other relationship property to ensure an equal division.

Ms Alalääkkölä’s appeal to the Supreme Court sought to avoid her copyright in artworks being considered ‘relationship property’ and therefore subject to the ordinary division of property. The Supreme Court confirmed that copyright is property, and is capable of being relationship property for the purposes of the Property (Relationships) Act 1976 (PRA). Accordingly, the appeal was dismissed. 

Copyright as Personal Property 

The Court recognised that under the Copyright Act 1994 (Copyright Act) the bundle of rights that make up copyright qualify as personal property in New Zealand. The Court discussed how copyright comes into existence and vests in the author when an original work is created. The Copyright Act provides that a copyright is “transmissible, as personal or moveable property” and copyright grants the owner exclusive rights such as making copies. 

Copyright may also be protected in the same way as other property rights, such as by an action for damages or an injunction. Accordingly, the Court held, copyright has a value which can be realised in monetary terms. 

For these reasons the Supreme Court held that copyright is personal property in New Zealand, thereby upholding the Court of Appeal decision. 

In reaching its decision the Supreme Court emphasised the important distinction between copyright and related, but separate, moral rights. Upon creation of an original work moral rights are vested in the author alongside the copyright. These include the right to be identified as the author and the right to object to derogatory treatment of the work. Moral rights may be waived by the author but cannot be transferred to another (unlike copyright). Moral rights will, however, pass to the author’s legatee upon their death.

Whereas moral rights exist to foster creativity, copyrights exist as economic incentives which authors may exploit for gain. Copyrights are similar in this way to other forms of intellectual property such as patents.

The Court acknowledged that in a hostile separation an artist, such as Ms Alalääkkölä, may have reasonable concerns about derogatory treatment of the work that is harmful to her reputation and which may breach her moral rights. The artist may also reasonably fear that the former partner will exploit copyright in ways that detract from the value of future works.

Justice Miller stated that these considerations suggest courts should design orders to minimise conflict in the distribution of property and unnecessary harm to the artist’s future reputation and income. However, they do not compel the conclusion that copyright is not property at all.

The Court also confirmed that to treat copyright as property does not detract from the intrinsic value of copyright. Rather, it recognises the value of the bundle of economic rights that copyright embodies. 

Given that copyrights were personal property, the next question for the Court was whether they could be considered relationship property. 

Copyright as Relationship Property 

Relationship property under the PRA includes any personal property acquired during the course of the relationship. Ms Alalääkkölä argued that if copyright is personal property, it does not qualify as property “acquired” during the marriage. She argued copyright is derived from the author’s personality and skill, and therefore exists prior to the relationship. 

The Court disagreed and confirmed that copyright is created when the original work is created. Therefore, if an original work were created during the relationship the corresponding copyright would be property “acquired” during the relationship and therefore relationship property. The Court also observed that the PRA employs an expansive definition of “acquired” which would capture the present situation. 

The Court remarked that Ms Alalääkkölä’s argument attempted to combine the separate economic rights making up copyright with the moral rights which are distinct under the Copyright Act.

A further argument raised was that treating copyright as relationship property deters creative activity by the granting of property rights to the non-author spouse. This submission was not accepted. Rather, it was noted that a court is likely to find that the author entered the relationship willingly, hoping it would endure, and that the relationship may have fostered creativity before it ended. 

The Court observed that where an author fears a relationship property claim, s 21 of the PRA allows parties to contract out of the PRA.

Treatment of ‘property’ at settlement 

Having confirmed that Ms Alalääkkölä’s copyrights were relationship property, the Court turned to how the pool of relationship property should be divided. 

The Court recognised that relationship property is typically valued as at its market value at the date of the hearing of the application. The Court also recognised that the Copyright Act confers a right to an author to decide when to disclose their works to the public, as an original work is associated with an artist’s personality and reputation. 

The artist’s right to decide whether and when the artwork should be disclosed to the public should be respected, so far as it can be exercised consistent with a just division of relationship property, given an original artwork is closely associated with an artist’s personality and reputation. The Supreme Court held that a just division in this case would be an equal one by value. So long as that is achieved, the Court found that the relationship property may be distributed in a manner which protects Ms Alalääkkölä’s control over previously unpublished works that she does not now wish to publish. 

The Court agreed it was appropriate to adopt the four categories of works proposed by Ms Alalääkkölä to assist in valuation by the Family Court: incomplete, unsuitable or damaged works; private collection; one-off unique paintings (some commissioned); and works which have been, or were intended to be, the subject of multiple copies. This recognises the different economic value attributable to works depending on whether those works are likely to be commercialised by the copyright owner.

The appeal was dismissed and the Supreme Court remitted the case to the Family Court to decide the value and distribution or sale of the artworks and copyrights in them.

Key takeaway

This decision confirms that copyright works created during a relationship can be classified as relationship property. The decision also demonstrates the importance and value of contracting out agreements to assist in identifying and protecting intellectual property rights during a relationship.  

Tompkins Wake has experts in both intellectual property and relationship property matters. If you have any questions regarding this decision and what it means for you, please reach out to one of our experts below.

A copy of the Supreme Court decision can be found here.