IP Law Daily, COPYRIGHT—N.D. Ill.: Estate of Henry Darger states claims against landlords who appropriated reclusive artist’s works after his intestate death in 1973, (Mar 29, 2023)

By Robert Margolis, J.D.

Court rejects landlords’ timeliness arguments, as well as argument that Darger “gifted” his works and attendant copyrights to them.

The Estate of reclusive artist Henry Joseph Darger, who died in 1973 and left behind several written works and drawings that have received significant posthumous acclaim, may pursue copyright and trademark claims against the landlords who found those works when Darger died and have been exploiting them for the past 50 years, the federal district court in Chicago has held. The court denied the landlords’ motion to dismiss the Estate’s claims brought under the Copyright Act, Lanham Act, and state law (Estate Of Henry Joseph Darger v. Lerner, March 28, 2023, Durkin, T.).

Darger lived alone in a small apartment in the Lincoln Park neighborhood of Chicago before dying in obscurity and intestate in the 1970s. He had a difficult childhood, passing through an orphanage and then a mental asylum before escaping at the age of 16. He then worked at various “menial” jobs. From 1930 until he moved to a care facility in 1973 and shortly thereafter passed away, he lived in that Lincoln Park apartment. His landlords were Nathan and Kiyoko Lerner.

Darger was, unbeknownst to others, a prolific writer and artist. When he died intestate, he left behind a 15,000 page epic fantasy novel, which included about 300 pages of watercolor, pastel wash, pencil, and collage illustrations, as well as other large written works. His works subsequently became well-regarded in the “outsider art” genre, and a single illustration will regularly sell for between $200,000 to $400,000, and some for as much as $750,000.

The Lerners had seen Darger’s works displayed on the walls of his apartment during his life, when they entered at various times to perform maintenance work. At his death, they took control of his works under the allegedly false pretense that he had gifted the physical copies of his works, and their associated copyrights, to them. While allegedly wrongfully purporting to be representatives of the “Henry Darger Estate,” the Lerners have donated, loaned, sold, exhibited, reproduced, and distributed portions of Darger’s works to various museums and galleries. They also applied for United States Copyright Registrations for Darger’s works, allegedly by “falsely listing themselves as Claimants” of his works. They also have registered the domain name “officiallyhenrydarger.com,” by which they use his name, image, and likeness, and allegedly “exploit” his works.

In June of 2022, the probate court in the Circuit Court of Cook County, Illinois, approved a distant relative to be the administrator of Darger’s Estate, and to take possession of and collect the assets of the Estate. The Estate then sued the Lerners, alleging that their claim of copyright is invalid, because the assertion he gifted his works and copyrights to them is false. The Estate also asserts in the lawsuit that copyright interests do not automatically transfer with tangible objects, and there was no written document transferring copyright ownership to the Lerners. The Estate thus claims that the tens of millions of dollars the Lerners have gained in profits from Darger’s works has been wrongfully gained without the Estate’s authorization and permission. The Estate brought claims for declaratory judgment of copyright ownership and copyright infringement (both under the Copyright Act); equitable easement, unfair competition and false designation of origin, and cybersquatting (under the Lanham Act); and various state law claims. The Lerners moved to dismiss.

Timeliness. The defendants first argued that the Estate’s claims are untimely under the doctrine of laches and applicable statutes of limitations, because Darger died nearly 50 years ago. Because both arguments are affirmative defenses, and complaints need not anticipate them, the defendants had to establish that there is no conceivable set of facts consistent with the complaint that would defeat those defenses. The defendants could not meet this standard, the court held.

As to laches, the defendants argued that the 50-year wait before bringing suit was unwarranted because Darger’s art was well-known, and some relative should have known about him. The court rejected this argument as raising fact questions not appropriate for resolution on a motion to dismiss. Moreover, laches is not an available defense in cases governed by a statute of limitations, such as is provided in the Copyright Act.

For limitations, defendants argued that no limitations period potentially applicable in the case exceeds five years, and Darger died nearly 50 years ago. But as the court noted, there are conceivable sets of facts consistent with the complaint that would render the claims timely. First, the separate-accrual rule applies to Copyright Act claims, such that the statute of limitations runs from each successive violation. The Estate alleges not only that the defendants infringed Darger’s copyrights 50 years ago, but that they continue to do so. In addition, the discovery rule applies to copyright and the other claims, such that they do not accrue until a reasonable person would have learned of the violation of rights. Given Darger’s hermit existence and difficult life that cut him off from relatives, a conceivable set of facts exists that no relative would have known about the defendants’ conduct until recently. Moreover, the relative was only appointed as Estate administrator in 2022. For these reasons, the court rejected the limitations arguments.

Copyright ownership. The defendants argued that the Estate failed to establish a fundamental element of its copyright claims, that the defendants lacked ownership of the Darger copyrights. But as the court explained, their argument was based on confusing the standards governing a motion to dismiss with those governing summary judgment motions. Defendants contended that the Estate’s complaint lacked “evidence documenting Mr. Darger’s actions,” “evidence documenting the gift [to them by Darger] as a ‘pretense,’ and ‘false,” and that it failed to include “documents and testimony” that would support the Estate’s claims. A complaint need not include evidence, however. Nor must it rule out all “competing inferences,” as the defendants also argued. On a motion to dismiss, inferences are drawn in favor of the plaintiff, not the defendants, the court explained.

Copyright transfer. The complaint alleges that defendants’ copyright ownership claims are invalid because Darger did not convey ownership of those copyrights to them in writing, as required by the 1976 Copyright Act, 17 U.S.C. § 204(a). The defendants argued that this claim sets forth the wrong standard, because at the time of Darger’s 1973 death, the 1976 Copyright Act was not in force and under the 1909 Copyright Act and the common law, transfer of the physical work was sufficient to transfer copyrights, with no writing required. The court agreed with much of the defendants’ premise—despite the 1976 Copyright Act’s explicit preemption of all pre-1978 copyrights, “the respective rights of parties” are still determined by the applicable law at the time of the transfer, in this case pre-1976, and under the common law, the transfer of copyright did not need to be in writing. But as the court pointed out, mere transfer of the physical work alone did not suffice to transfer common law copyright in the work; some manifestation of the intent of the transferor was required. Though the complaint pled the wrong standard and thus did not plead any allegations of Darger’s intent, similar to the timeliness arguments, the defendants’ claim of ownership in the copyrights is an affirmative defense that the Estate need not have pleaded around. Citing the allegations that the defendants’ claim of a “gift” is false, the court held a reasonable inference can be drawn from the complaint that Darger did not intend to transfer copyrights to them.

Preemption. Concluding that the rights at issue in the Estate’s equitable easement and state law deceptive trade practice claims are not the equivalent of the exclusive rights protected by the Copyright Act—“reproduction, adaptation, publication, performance, and display”—the court also denied defendants’ motion to dismiss on preemption grounds. The equitable easement claim asserts the right to physical possession of Darger’s works, which is a different right than those protected by copyright. And while deceptive trade practices claims based on passing off another’s copyrighted works as one’s own (“reverse passing off”) generally are preempted, that is not the nature of the Estate’s claim here. Instead, the Estate alleges that one of the defendants has falsely held herself out as a representative of the Estate. Misrepresentation about one’s affiliation is not among the exclusive rights protected by the Copyright Act.

Lanham Act. Finally, the court rejected all of the defendants’ arguments for dismissing the Lanham Act claims. First, it found defendants’ argument that the complaint failed to identify the trademark allegedly infringed or explain why Darger’s name is protected “puzzling.” The complaint did identify “the HENRY DARGER mark and name” and did assert that it is protectible as the source identifier. Next, whether Kiyoko Lerner, who registered a trademark in Darger’s name, holds a valid trademark is a matter outside of the complaint, thus raising a factual dispute that cannot properly be considered on the motion. Finally, the defendants’ arguments that the Estate did not properly plead likelihood of confusion or the defendants’ bad faith intent also raised factual issues not appropriate to resolve on a pleading motion, the court held.

The Case is No. 1:22-cv-03911.

Attorneys: Marcus Stephen Harris (Taft Stettinius & Hollister, LLP) for Estate of Henry Joseph Darger. David Wilson Hepplewhite (David W. Hepplewhite, P.C.) for Kiyoko Lerner.

Companies: Nathan and Kiyoko Lerner Foundation

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