In the recent case of Alalaakkola v Palmer [2021] NZHC 2330, the High Court ruled that copyright in paintings is “relationship property”, and therefore can be divided as property between separated partners at the end of a marriage as opposed to simply vesting in the creator of the paintings.

This might come as a shock when we consider the individualistic notion of copyright laws and the strong bond between authors and their original creative works. What does this mean for creators of copyright works after a marriage ends? Who owns the work they create? Here’s a summary of the case.

What happened

Finnish-born artist Sirpa Alalaakkola, based in the Marlborough Sounds and known for her vibrant Kiwiana-inspired life and landscape paintings, separated from her husband Paul Palmer in 2017. During the course of their 20 year marriage, Ms Alalaakkola had created a vast number of paintings. Following separation, Mr Palmer entered the family home and took a number of Ms Alalaakkola’s paintings for ‘leverage’. Mr Palmer not only wanted ownership of some of Ms Alalaakkola’s paintings, but also copyright to those paintings so that he could reproduce prints of those paintings for sale.

The Family Court was required to give directions as to the division of the relationship property. While the parties had agreed to Mr Palmer being able to keep certain paintings, the Court had to decide:

• whether the copyright in the paintings created by Ms Alalaakkola during the course of the marriage could be considered relationship property; and
• if it was relationship property, whether that copyright could potentially be transferred from Ms Alalaakkola to Mr Palmer as part of the division of relationship property under the Property (Relationships) Act 1976.

What the underlying law says

This case is the first time the Copyright Act 1994 (Copyright Act) has come face to face with the Property (Relationships) Act 1976 (PRA) in New Zealand courts, creating a novel legal situation between two pieces of legislation of unlikely pairing.

Broadly speaking, under the PRA, all property that is acquired during a marriage is considered relationship property under the Act, unless it is “separate property” of one of the spouses. The PRA carries a presumption of equal sharing, recognizing the equal contribution of both spouses to the marriage partnership. This means all relationship property is to be divided equally, unless extraordinary circumstances apply that would make an equal division of property to be “repugnant to justice” – which is a very high bar to meet.

In comparison, the Copyright Act provides copyright owners with exclusive rights in the original works, including the right to copy a work. An author or creator of an original work is deemed to be the first owner of copyright.

Family Court ruling

The initial Family Court Judge noted that each painting had two distinct and separate property rights – the painting itself, and the copyright attached to each painting. The Judge found that the copyright in each painting was separate property of Ms Alalaakkola and not relationship property, reasoning that only Ms Alalaakkola was involved in the creation of the artistic works, relying on her skill which is a particular qualification that is personal to her, and a skill which she had prior to the relationship. The Judge felt that this approach was consistent with section 16 of the Copyright Act, which vests copyright in the author of an artistic work only.

High Court appeal

Mr Palmer appealed the Family Court decision, claiming (among other things) that the copyright in the paintings created during the relationship should be considered relationship property and divided equally between parties.

The High Court Judge disagreed with the Family Court and ruled in favour of Mr Palmer. It found that as a property right, copyright could be captured within the definition of relationship property under the PRA. There was no indication under either the Copyright Act, or the PRA, that property rights under the Copyright Act should be treated any differently from any other sort of property produced or acquired by a partner or spouse during the course of a relationship.

The High Court Judge considered it was erroneous of the Family Court Judge to focus on Ms Alalaakkola’s skill rather than the property her skills created, as that is not where the focus should lie. The PRA is social legislation that relies on a presumption of equal sharing of property, meaning property that is created during the course of a relationship, is relationship property. Any concern about reproductions of paintings undermining Ms Alalaakkola’s value and saleability was considered simply a consequence of division of property and not a clear enough reason to decline transfer of copyright.

Having decided that copyright is part of the relationship property equation, the High Court Judge has sent the case back to the Family Court, for the Family Court Judge to decide exactly how the relationship property will be divided. We can update you further once that decision issues.

What does this mean for artists and copyright owners

Although the High Court decision means it’s possible for Mr Palmer to own copyright in Ms Alalaakkola’s paintings, whether that will actually be the case will depend on exactly how the Family Court Judge orders the division of the property. Copyright and ownership of the paintings could, for example, ultimately still vest in Ms Alalaakkola, in exchange for a smaller slice of the other goods in the relationship property pie.

The case exposes some of the limitations in copyright. Although often associated with creatives and seen as their right to protect original expressions, copyright is at its heart an economic and property right allowing for some economic compensation in relation to an original work. This may not fully capture the connection and intrinsic ‘right’ an artist or author might feel in relation to the works they have created. Works of art are often very personal to artists, as are other kinds of original works to creatives of other disciplines. Having a court rule that copyright could be taken away from an author in favor of their ex-partner, may feel rather unjust.

Under the New Zealand Copyright Act, moral rights are available to authors of original works, though these are merely attribution rights and do not give rise to economic compensation. Unlike copyright (and performers’ rights) which can be assigned, moral rights cannot be assigned and remain with the author.

Moral rights include the right to be identified as an author, and the right to object to derogatory treatment of a work. These rights have never been truly tested in the New Zealand courts, but could theoretically be enforced if they are asserted by the author. Moral rights were not discussed in Alalaakkola v Palmer, but it could be assumed that Ms Alalaakkola is still entitled to be attributed as the author of her works, and for her works to not be subjected to derogatory treatment, even if those works and their copyright end up being owned (or jointly owned) by Mr Palmer.

For particularly prudent authors of creative works, who wish to be certain as to how copyright in their original works will be treated in the event of separation, there may be some legal mechanisms available to mitigate any risk of unintended transfer of copyright. These mechanisms will need to be considered carefully on a case by case basis.