It’s not just the house: intellectual property in the context of separation

The Supreme Court has confirmed that copyright in artworks created during a marriage is relationship property under the Property (Relationships) Act 1976 (PRA). The decision in Alalääkkölä v Palmer [2025] NZSC 9 sets a precedent for how courts should approach the division of intellectual property in relationship property disputes.

The Dispute Over Copyright

The case involved artist Sirpa Alalääkkölä and her former husband Paul Palmer. The couple were married for 20 years, from 1997 to 2017. Alalääkkölä built a career as a commercial artist and the sale of her artwork was the family’s primary income source.

When the marriage ended, a key issue emerged: should the copyrights in her artworks, created during the marriage, be classified as relationship property subject to division under the PRA? The issue has been examined by the Family Court, High Court, Court of Appeal, and now finally, the Supreme Court.

Alalääkkölä argued the copyright in her artworks were not property for the purposes of the PRA, but if they were, they were her separate property and not subject to the compensatory provisions of the PRA.

Palmer argued the copyrights were relationship property. He initially sought to retain a share of the artworks, and planned to commercialise their copyright, including selling reproductions and merchandise. Later, he agreed that Alalääkkölä should retain the artworks and copyrights but requested compensation under the PRA.

Supreme Court Ruling: Copyrights Are Property

The Supreme Court held that copyright is a type of personal property and falls within the PRA’s definition of "property." It rejected the argument that copyright should be treated differently from physical property. Instead, the Court emphasised that copyrights carry economic value and are assignable, making them subject to the PRA.

Copyrights as Relationship Property

One of the most debated aspects of the case was whether copyrights should be considered relationship property or separate property. The Supreme Court held that:

• Copyrights created during the marriage were acquired during the relationship and thus classified as relationship property.
• The fact that an artist’s skills were developed before the marriage did not mean that the resulting copyrights were separate property.
• Intellectual property rights, like physical assets, must be considered in a fair division of relationship property.

Implications for Artists and Intellectual Property Owners

This ruling has significant implications for artists, writers, musicians, and others whose creative works generate copyrights:

• The decision affirms that copyrights, like other assets, must be factored into relationship property settlements.
• Whilst the artist may retain the artworks and attached copyrights, the non-creator spouse would be entitled receive financial compensation for their share. The Court acknowledged the complexity of moral rights—such as the artist’s right to control the integrity of their work—and suggested that courts should consider the creator’s reputation and future income when making property division orders.

Valuation

Whilst this care resolved the primary question of whether copyright constitutions ‘property’ for the purpose of the PRA regime, it did not determine valuation of copyright.

The Court accepted Alalääkkölä’s categorisation of the artworks into four categories being:

1. Incomplete, unsuitable or damaged works;
2.  Artworks in her private collection;
3. Unique and one-off paintings (e.g. commissions)
4. Works that have been or were intended to be subject of multiple copies.

The Supreme Court made the following comments with regard to valuation:

1. Artworks which fall into the first category should be valued on the basis they will not be disclosed and remain in the private domain. Their value, if any, may be limited e.g. as canvases that the artist may use for future works.
2. Artworks which fall inti the second category should be valued on the basis they will not be sold by the artist or her executor. That will affect their valuation, if any, at valuation date, and it will be a question of fact which artworks fall into this category.
3. Artworks in the third category should be valued on the basis they will remain the only copies in existence, and any value in the copyright should be reflected in the price of the physical work.
4. Artworks I the fourth category should be valued on the assumption the works will be sold on the basis the copyright will be exploited. It is valuation of this last category of artworks which is likely going to prove challenging to determine.

Ultimately, the valuation of the copyright was not determined by the Supreme Court. The Supreme Court remitted the case to the Family Court to determine the exact valuation of the copyrights and the appropriate financial adjustment for Palmer.

Final Comments

The Supreme Court’s decision in Alalääkkölä v Palmer demonstrates that it is not just tangible property that is of relevance in relationship separations. Intellectual property also attracts value, and may be classified as relationship property, subject to equal division under the PRA. The decision could, in theory, extend to many other forms of intangible property: including interests in music, apps, website designs, and other creative innovations.

The decision ensures that the financial value of creative works is accounted for in property settlements. This sets an important precedent for relationship separations involving artists and intellectual property owners where the value and source of the family’s income is less conventional than ordinary forms of tangible property or income.

If you are going through a relationship separation and need legal advice, feel free to contact Joanne or Ruth from our Family Team for a confidential discussion