One slot machine to rule them all?

The estate of 'The Hobbit' and 'Lord of the Rings' author JRR Tolkien sues over copyright infringement and dubious merchandising.

By Bruce Kennedy Nov 20, 2012 5:42PM

Image: Hollywood - Comstock, SuperStock"My precious," indeed.

The estate of J.R.R. Tolkien, the Oxford University professor who wrote "The Hobbit" and "The Lord of the Rings" trilogy, has joined forces with book publisher HarperCollins to sue Time Warner (TWX) subsidiary Warner Brothers and some of its allies for what amounts to a king's ransom regarding merchandising rights for the famed fantasy saga.

The lawsuit, filed Monday in U.S. District Court in Los Angeles and obtained by The Hollywood Reporter, charges Warner Brothers, its subsidiary New Line Productions and the Saul Zaentz Company’s Middle-earth Enterprises division with copyright infringement and breach of contract -- and is demanding at least $80 million.

At issue are spin-offs that even Professor Tolkien would have had trouble imagining: recent digital entertainment and video games based on the hugely-successful "Lord of the Rings" films as well as the upcoming "Hobbit" movie trilogy. The first "Hobbit" film is scheduled for release next month.

The film rights to Tolkien's works were sold in 1969, along with limited merchandising rights, for a reported £ 250,000 (about $5.4 million in 2012 dollars) and 7.5% of future profits.

"The original contracting parties thus contemplated a limited grant of the right to sell consumer products of the type regularly merchandised at the time such as figurines, tableware, stationery items, clothing and the like," states the lawsuit. "They did not include any grant of exploitations such as electronic or digital rights, rights in media yet to be devised or other intangibles such as rights in services."

The lawsuit also complains that, following the "unprecedented financial and critical success of the Films, defendants have, with increasing boldness, engaged in a continuing and escalating pattern of usurping rights to which they are not entitled." It cites as examples downloadable video games based on "The Hobbit" and "The Lord of the Rings." But to make matters worse, according to the lawsuit, the defendants have begun licensing the production and distribution of both online and in-casino gambling games featuring characters and story elements from the books.


"Gambling constitutes a further category of rights which have never been granted to defendants (and which plaintiffs themselves would intend never to exploit)," continues the complaint. "Not only does the production of gambling games patently exceed the scope of defendants’ rights, but this infringing conduct has outraged Tolkien’s devoted fan base, causing irreparable harm to Tolkien’s legacy and reputation and the valuable goodwill generated by his works."


This isn't the first legal clash over Middle Earth. In 2009 Tolkien's estate and HarperCollins resolved a lawsuit with New Line Cinema over claims the movie-makers didn't pay 7.5% of the gross receipts from the "Lord of the Rings" films.


At the time of that settlement, Warner Brothers President & Chief Operating Officer Alan Horn -- now chairman of Walt Disney (DIS) Studios -- said he was glad to put the litigation behind him. "We all look forward to a mutually productive and beneficial relationship in the future,” he added in a press statement.

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