Copyright Ownership in Personal and Business Relationships: Reminders from Recent Case Law

Two recent New Zealand court decisions highlight how copyright is often overlooked at key stages of personal and business relationships.

Copyright and relationship property

The New Zealand Supreme Court decision in Alalääkkölä v Palmer[1] confirms that copyright in artistic works can be relationship property under New Zealand’s law. 

Ms Alalääkkölä and Mr Palmer separated in 2017. The dispute before the Court was whether copyright in the paintings created by Ms Alalääkkölä was relationship property for the purposes of the Property (Relationships) Act 1976 (PRA).

The Court found that while moral rights attached to copyright cannot be transferred and are retained by the artist[2] the economic rights attached to copyright[3] did indeed fall under the umbrella of relationship property.  These rights are therefore dealt with in the same way as any other relationship asset under the PRA.

The commissioning rule is confirmed again

Copyright continues to have its day in front of the Court in New Zealand with the High Court decision of Marx v Ruban[4] issued shortly after Alalääkkölä v Palmer.  In this case, the topic of dispute was copyright in software in a business situation. 

Mr Marx and Mr Ruban were co-directors of Shuttle Solutions Limited, established in 2021.  Ruban developed the cornerstone software for Shuttle Solutions, while Marx at the helm of marketing and responsible for growing the customer base. The dispute before the Court arose when, in 2024, Ruban sought to use the same software for a competing business. 

Ruban claimed he owned the software and its corresponding copyright, and therefore was entitled to use it for another business.  Marx argued that the software was made for Shuttle Solutions, and Shuttle Solutions was therefore the owner of copyright[5].

Central to this decision is the “commissioning rule”. That is, unless there is a written agreement otherwise, if the author of a work is commissioned by another person, then ownership of the copyright will lie with the person commissioning the work.

The Court considered the evidence indicated Mr Ruban made the software for Shuttle Solutions, and therefore the commissioning rule applied.  On this basis, Shuttle Solutions owns copyright and an interim injunction was granted to prevent Ruban’s infringing use of that copyright.

Copyright in software and its part as a business asset is not a controversial consideration, however, the lack of clear documentation around ownership of this copyright resulted in this dispute. 

Key points

Copyright attaches to a variety of creative products – including art, software, architectural drawings, logos, and designs for products. 

These cases help highlight the need to put in place mechanisms to avoid loss of control of copyright as part of a library of valuable intellectual property rights. 

Some key considerations to bear in mind are:

·        Don’t simply rely on the terms set out in legislation.

It is risky to rely upon rights provided under an Act without properly understanding the limitation that might exist.  Various rights may be connected to any one piece of work, including rights identified in different legislation or developed through common law over the years.

·        Understand what form the intellectual property takes and how to best protect it.

It is essential to identify and understand how intellectual property rights can be protected, whether by way of formal registration as a patent, design, or trade mark, or through a network of use agreements.  In some cases, a combination of registrations and formal agreements might be necessary to put the rights owner in the best position.

·        Prepare for a ‘worst case scenario’.

In any commercialising situation, the question should be raised early of what happens to intellectual property rights if the relationship sours.  This includes considering how to properly document ownership of rights and establishing a clear framework of what will happen in the event of a split.

An intellectual property law expert is the best person to help you work through these questions and should be consulted before you start commercialising your IP.  Once a framework is in place, you can reduce the risk of losing valuable IP rights and maximise the commercial advantages of your IP.

[1] Alalääkkölä v Palmer [2025] NZSC 9

[2] such as the right to be recognised as an author and non-derogatory treatment of copyright work

[3] such as the right to show or reproduce items in which copyright resides

[4] Marx v Ruban [2025] NZHC 594

[5] Section 21(3) of the Copyright Act 1994 provides that a person who commissions a copyright work is the first owner of copyright.