Copyrights can be relationship property, ruled the Supreme Court; a rule which applies to reproduction rights over original works as varied as paintings, books, audio-visual media, technical manuals and building designs. Copyright valuation is not straightforward. The Supreme Court set out rules for valuing copyright in paintings.
Ownership of copyright in some 250 artworks was disputed in a Supreme Court hearing between painter Sirpa Alalaakkola and former spouse Paul Palmer. They separated in 2017, after a twenty year marriage. Some of these paintings are currently held in the District Court at Blenheim, pending resolution of their legal dispute.
Their drawn out legal battle has seen Ms Alalaakkola eventually agreeing artwork she produced during their relationship is relationship property. But she fiercely objected to her former spouse having any share in copyrights.
She was concerned her status as an artist could be denigrated by use of images from her artwork reproduced on the likes of fridge magnets and tea towels.
Rules governing copyright allow the author of artistic works to control and monetise reproductions. This economic incentive encourages creativity.
Copyright Act states copyrights are ‘property.’ The right to reproduce or copy an existing ‘artistic work’ lasts for the life of the work’s author plus fifty years. Heirs of a deceased creative talent can get to enjoy royalties generated from their celebrated forbear’s work for fifty years from death.
For paintings, copyright is bundled in when an artist sells the physical painting, unless the sale contract states copyright remains with the artist.
In the Supreme Court, the relationship property dispute centred on copyright in Ms Alalaakkola’s unsold paintings.
This copyright is relationship property, the court ruled; its value to be shared with her former spouse.
Their dispute was sent back to the Family Court, to decide the value of Ms Alalaakkola’s unsold artwork and associated copyright.
Valuation may be difficult. For many of her paintings, copyright will have no value.
The Supreme Court offered guidance.
No copyright value lies in damaged or incomplete artwork. These are canvasses which can be painted over at a later date.
No copyright value lies with paintings intended to be kept as part of a private collection. For Ms Alalaakkola, this includes nudes and some works she now considers culturally insensitive.
No residual copyright value lies in paintings sold on the basis no reproductions are permitted.
There is copyright value in artistic works which have been reproduced, or are intended to be reproduced.
Should the two be unable to agree on the potential market for both her artwork and any reproductions, the Family Court might direct that one or more items be sold on the open market to establish market values, the Supreme Court suggested.
In legal argument, Ms Alalaakkola said any court ruling that copyrights are relationship property will have the potential effect of deterring creative activity. Spouses can contract out of the Property (Relationships) Act, agreeing any creative output by either spouse is not relationship property, the Supreme Court pointed out.
Ms Alalaakola’s concern that any loss of control over copyright meant she might be demeaned by poor and insensitive reproductions of her work was specifically protected by the Copyright Act, the court said. After copyright is sold, artists still have the right to block any derogatory reproduction which damages their reputation.
This statutory ‘moral right’ is a personal right akin to a right to sue for defamation, the Supreme Court said. As a personal right, it is retained by the artist. ‘Moral rights’ are not relationship property.
Alalaakkola v. Palmer – Supreme Court (6.03.25)
25.081