Who owns copyright in original works created during a marriage or long-term relationship?
The New Zealand Family and High Courts have recently had to consider the interesting question of whether the intangible right of copyright in an artistic work is relationship property for the purposes of division of property following a couples separation. The Family Court thought not, but the High Court ruled it was.
Party A - the artist - is an established contemporary artist known for her large scale colourful depictions of New Zealand life. The artist creates original paintings and also sells canvas and paper prints of her works. Party B was her ex-husband who sought both some of the physical paintings and the copyright in those paintings as part of the divorce settlement.
The Family Court had found that while the paintings created during the parties’ marriage were relationship property the copyright in those paintings was not and the Court did not have jurisdiction to order the transfer of this separate property. Therefore, all copyright remained with the artist. The unhappy husband appealed the decision to the High Court.
In the High Court, Justice Isac found that copyright in the artist’s paintings created during the relationship was relationship property, which lead to the interesting issue of valuation and division of the paintings by value. This potentially thorny issue was referred back to the Family Court.
The result may be surprising given the personal skill, training and experience that the artist had developed over many years and the personal nature of creating works of art. At the end of the day, the judge treated the copyright the same as any property right. Why was this? This was due to the combined effect of the Property (Relationships) Act 1976 and the Copyright Act 1994.
Property (Relationships) Act 1976 and the Copyright Act 1994
The Property (Relationships) Act is a piece of social legislation and at its heart it has a presumption of equal sharing of property at the end of a relationship. Thus, generally, following the end of a relationship that had lasted for 3 or more years, a separating couples’ property is to be divided equally between the (married, civil union or de facto) couple when they separate.
The term “property” is defined inclusively in the Property (Relationships) Act, and includes personal property, any interest in personal property and any other right or interest. It was beyond dispute that the paintings themselves were relationship property. The issue was whether the copyright in those original artworks was also to be considered to be relationship property.
Under the Copyright Act 1994, copyright is a property right. As such, it followed for the judge that the definition of property in the Property (Relationships) Act, and in particular the inclusion of the phrase “any other right or interest” captures copyright in artworks. The judge found there was nothing in either Act that removed intellectual property from the reach of the Property (Relationships) Act. Further, there was nothing to suggest that the property rights created by the Copyright Act should be treated any differently from any other sort of property produced or acquired by a party during the course of a relationship. Under Copyright Act copyright is transmissible as personal or moveable property by assignment, testamentary disposition or operation of law.
In the division of relationship property, the presumption is that each party is entitled to share equally in any relationship property. The only relevant exception to this is when there are extraordinary circumstances that make equal sharing of property repugnant to justice. The judge found that the terms “extraordinary circumstances” and “repugnant to justice” import an incredibly high test: “such emphatic language is rare in legislation, and its use indicates the presumption of equal division should rarely be departed from”.
The judge accepted that valuing the copyright will be the most challenging question, but he believed it was a necessary step to be taken to ensure equal division of property under the Property (Relationships) Act.
The judge ordered that the husband was entitled to receive half the paintings - by value (not number) - created during the relationship which meant that valuation of the paintings was needed to ensure an equal distribution.
The issue has been remitted to the Family Court to make the necessary vesting orders to deal with the physical division of the works. Justice Isac noted that the Court is not limited to vesting ownership of specific paintings in one party or the other, and that there is no requirement that copyright in a work must follow an order vesting the physical work in other party or the other.
Although not discussed in the cases before the court, any moral rights that exist are not transmissible. Therefore, where the moral rights to be identified as the author and to object to derogatory treatment of the work have been asserted, the author - or in this case artist - would retain those rights.
The courts findings apply to other forms of intellectual property. Trade marks, patents and registered designs are all personal property.
It is possible to contract out of the Property (Relationships) Act with the parties making an agreement regarding the status, ownership, and division of their property. The agreement can apply to any future property. This is something for people who may wish rely upon their creations as their source of income to consider.
Elena Szentiványi - October 2021