Supreme Court Upholds Copyright in Artworks Qualifying as Relationship Property

The Supreme Court has confirmed both that copyright in artworks fall within the Property (Relationships) Act 1976 (PRA) definition of ‘property’ and that those copyrights should be classified as relationship property if that property was ‘acquired’ during the relationship.

Background:
As discussed in our earlier articles here, here and here, both the High Court and the Court of Appeal rejected the Family Court Judge’s finding that the copyright solely belongs to Ms Alalääkkölä on the basis that the skill required for producing the artworks preceded the relationship. Both higher Courts held that the use of prior acquired skills during a relationship does not justify putting the property (including intangibles such as copyright) so produced or acquired beyond the reach of the PRA. Those Courts consequently found the copyrights to be part of the bundle of relationship property that was to be shared equally. The High Court left the specifics of the sharing to the discretion of the Family Court. However, the Court of Appeal considered it appropriate and in-keeping with the PRA’s ‘clean break’ principle to grant Ms Alalääkkölä’s request that the copyrights be solely vested in her with an appropriate adjustment to the division of other relationship assets. Despite being granted that request Ms Alalääkkölä appealed on the questions of whether copyright is ‘property’ under the PRA and if so can copyright be relationship property under the PRA.

Is copyright “property” under the PRA?
The Supreme Court began answering this question by elucidating the rights available under the Copyright Act 1994. That Act expressly provides at sections 113 and 120 that copyright  is a property right, being transmissible as personal or movable property and with forms of relief for infringement being the same as any other property right. It also distinguishes copyright from moral rights, with the former being a bundle of economic rights which may be sold or assigned and the latter being a bundle of personal rights which a living author cannot assign to others. While the Supreme Court acknowledges at [22] that the waiver of moral rights can involve monetization, the inability to assign moral rights means those rights do not qualify as property, whereas copyright does. On account of qualifying as personal property copyright qualifies as property under the PRA and there was no reason to exclude intangible personal property from the PRA’s definition of property, which, amongst other things, recognise the value of the bundle of economic rights that copyright embodies. While the recognition of copyright as a property right under the PRA can result in reasonable concerns regarding its court ordered allocation under the PRA, that does not negate copyright from being a property under the PRA.

Can copyright be relationship property under the PRA?
Section 8 of the PRA defines relationship property and the most likely provision of that section under which copyright in the paintings could qualify as relationship property is section 8(1)(e), which, subject to some exclusions, concerns all property ‘acquired’ by either partner after their relationship began. The Supreme Court considered this provision was satisfied for the following reasons:

1. in ordinary usage, “acquire” can mean “to get or obtain by any means”, which is a meaning wide enough to include things made or created by the owner;
2. the PRA uses “acquired” in a way that is consistent with it including property created during the relationship; 
3. section 18(1)(d) of the PRA includes the creation of relationship property as one of the contributions a partner can make to a relationship; and
4. copyright is a bundle of rights, each of which can naturally be said to have been acquired when a work is created.

While the creation of the works involved the author’s personal attributes and skills, the works produced can also be a product of the division of effort within the relationship. The author’s attributes and skills, whenever acquired, are not property, but the creation of an artefact to which copyright attaches through the use of those attributes and skills during the relationship makes that artefact relationship property. Consequently, the copyrights in the paintings must be brought into account in the relationship property settlement under the PRA.

Authors: Quinn Miller and Jim Piper

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