Suit says trio overstepped boundaries of 43-year old agreement

The estate of J.R.R. Tolkien has filed suit against Warner Bros., New Line and the Saul Zaentz Co., claiming that they overstepped the boundaries of a 43-year-old agreement by licensing slot machines, online videogames and other merchandise based on “The Lord of the Rings” and “The Hobbit.”

The suit, filed in U.S. District Court in Los Angeles on Monday, seeks at least $80 million in damages.

The estate, along with other plaintiffs including HarperCollins, also says that the defendants have registered trademarks or “intent to use” applications for “services licensing” such as hotels, restaurants, travel agencies, casino gambling and even housing developments.

A spokesman for Warner Bros. said the studio had not seen the suit and had no comment.

The suit cites a 1969 agreement that granted limited merchandising rights in “all articles of tangible personal property” other than novels, paperbacks and other publishing.

“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 suit states. “To emphasize the limited nature of the grant, plaintiffs predecessors-in-interest specifically reserved ‘the right to utilize and/or dispose of all rights and/or interests not herein specifically granted.'”

The suit claims that, since the success of the “Lord of the Rings” trilogy, Warner Bros. and Zaentz have “with increasingly boldness” engaged in “a continuing and escalating pattern of usurping rights to which they are not entitled.”

What appears to be of particular irritation to the estate is the licensing of gambling games on the Internet and in casinos. “Not only does the production of gambling games patently exceed the scope of defendants’ rights, but this infringing conduct has outraged Tolkien’s devoted fanbase, causing irreparable harm to Tolkien’s legacy and reputation and the valuable goodwill generated by his works.” The estate says that “fans have publicly expressed confusion and consternation at seeing ‘The Lord of the Rings’ associated with the morally questionable (and decidedly nonliterary) world of online and casino gambling.”

The 1969 agreement was signed by a previous executor corporation representing the rights and United Artists. Through a series of pacts, those rights eventually landed with Zaentz, New Line and Warner Bros.

The suit says that settlement talks have failed. The complaint claims copyright infringement and breach of contract, and it seeks a declaration from the court of the limitation to the merchandising rights.

A team led by Bonnie Eskenazi of Greenberg Glusker represents the estate.

“The Hobbit: An Unexpected Journey” is scheduled for release in the U.S. on Dec. 14.

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