Copyright and Relationship Property: A cautionary tale for artists

15 August, 2025 | Bret Gower

Introduction

The Supreme Court of New Zealand’s decision in Alalääkkölä v Palmer has clarified a long-standing ambiguity in family law: whether copyright in artworks created during a relationship constitutes relationship property under the Property (Relationships) Act 1976 (PRA). The case, involving artist Sirpa Alalääkkölä and her former spouse Paul Palmer, provides a nuanced framework for understanding the distinction between ownership of copyright and the economic benefits that may flow from it.

Copyright as property under the PRA

The Court held that copyright is property for the purposes of the PRA and may be classified as relationship property (in which case, it may be subject to the equal sharing provisions of the PRA).

This view aligns with the Copyright Act 1994, which defines copyright as a transmissible property right that vests in the author upon creation of an original work. The Court emphasized that copyright comprises a bundle of economic rights – such as reproduction, distribution, and public display – that are distinct from moral rights, which remain with the author and cannot be assigned during their lifetime.

Ownership vs. economic benefit

While the author might retain legal ownership of the copyright, the economic benefits derived from it – such as income from reproductions or merchandise – can be subject to division under the PRA. The Court rejected the argument that copyright, being a product of personal skill and expression, should be treated as separate property. Instead, it recognized that the creation of artworks during a relationship often involves contributions from both partners, whether through direct support or shared financial responsibilities.

This distinction is critical: the author may retain ownership of the copyright, but the non-author partner may be entitled to a compensatory adjustment from other relationship property to ensure equitable division. This approach respects the author’s moral rights while acknowledging the economic value generated during the relationship.

Implications for artists in relationships

For artists, the ruling has significant implications:

1. Copyright created during the relationship is relationship property
   Even if the artist retains legal ownership, the economic value of the copyright may be shared. This could include unsold works and future income from exploitation of those copyrights.
2. Moral rights remain with the author
   The artist retains the right to object to derogatory treatment and false attribution, which may influence how copyrights are valued and distributed. Courts must design settlements that minimise reputational harm and preserve the author’s control over unpublished works.
3. Deferred community property regime offers flexibility
   Ownership remains with the author unless a court assigns it otherwise. Artists concerned about future claims can contract out of the PRA under section 21, offering a proactive way to protect their creative assets.

Conclusion

The Supreme Court’s decision affirms that copyright is not merely a product of personal expression but a form of property with tangible economic value. Interestingly, the Supreme Court has returned the matter to the Family Court to determine the valuation of the copyrights – a process which will likely not be straightforward.

For parties in a relationship – especially those creating artworks – this case underscores the importance of understanding how intellectual property is treated under the PRA. Artists should seek and consider legal advice and possibly contracting out of the PRA to safeguard their creative and economic interests, while courts must balance equitable division with respect for artistic integrity.

For assistance with copyright matters and to become a client, complete the form below or contact Bret Gower on 09 837 6893 or email bret.gower@smithpartners.co.nz 

For assistance with relationship property matters or a contracting out agreement and to become a client, contact Natalie Miller on 09 837 6843 or email  natalie.miller@smithpartners.co.nz