Warner Bros., Tolkien Estate Settle $80 Million ‘Hobbit’ Lawsuit

Five years later and it appears Warner Bros. and the estate of author J.R.R. Tolkien have settled their lawsuit over the digital exploitation of The Hobbit and The Lord of the Rings. “The Tolkien Estate and book publisher HarperCollins filed a $80 million lawsuit in 2012 alleging that Warners, its New Line subsidiary and Rings/Hobbit rightsholder Saul Zaentz Co. infringed copyright and breached contract by overstepping their authority,” reports Hollywood Reporter. “The plaintiffs claimed that a decades-old rights agreement entitled the studio to create only ‘tangible’ merchandise based on the books, not other digital exploitations that the estate called highly offensive.” From the report: The lawsuit brought the two sides into a new battle. Previously, New Line and the Tolkien Estate had fought over profit participation, coming to a deal in 2009 pegged as being worth more than $100 million. As Warner Bros. readied a Peter Jackson big-screen adaptation of The Hobbit, the Tolkien Estate began investigating digital exploitations when its attorney received a spam e-mail about the Lord of the Rings: The Fellowship of the Ring: Online Slot Game. The subsequent complaint filed in court talked about irreparable harm to Tolkien’s legacy and reputation from the prospect of everything from online games to housing developments. In reaction, Warner Bros. filed counterclaims, alleging that repudiation of a 1969 contract and 2010 regrant caused the studio to miss out on millions in Hobbit licensing and decreased exposure to the Jackson films. Warners contended that digital exploitations was both customary and within its scope of rights. Those counterclaims became the subject of a side fight over whether Warners could sue for being sued. The 9th Circuit Court of Appeals agreed that Warner Bros. had properly asserted contract claims.


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