Judge nixes parody title but film companies, Tolkien estate escalate battle over commercialization of property

As a federal judge determined that the word “hobbit” is uniquely linked to the J.R.R. Tolkien characters, Warner Bros., New Line and Saul Zaentz are going on the offensive to protect their rights to bring Middle Earth to everything from videogames to slot machines.

In fact, even as U.S. District Judge Philip S. Gutierrez issued a temporary restraining order earlier this week that halts the release of a parody movie called “Age of Hobbits,” the bigger — and perhaps even more bitter — battle may be the litigation that the studios and the producer have against the Tolkien estate itself.

Warner Bros., New Line and Zaentz filed counterclaims against the estate last week, asserting that a suit that Tolkien’s heirs filed along with HarperCollins in November breached agreements in place to exploit “The Hobbit” and “Lord of the Rings.”

Tolkien’s son, Christopher, has made no secret that he is unhappy with the commercialization of his father’s works since the movies have turned the characters into merchandising sensations. He told Le Monde last summer that the proliferation has “reduced the aesthetic and philosophical impact of the creation to nothing.”

But the acrimony came to a head in November, when the Tolkien estate filed suit against the studios and Zaentz, claiming they overstepped the bounds of a 43-year-old agreement by licensing slot machines, online videogames and registering for a variety of trademarks related to the works, including hotels, restaurants and even housing developments.

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. The agreement was between a previous corporation representing the Tolkien estate’s rights, and United Artists. Through a series of pacts, those rights eventually landed with Zaentz, New Line and Warner Bros.

In a Jan. 18 response to a Tolkien estate lawsuit, Warner Bros. and New Line maintain that they do hold those non-tangible rights, and that the Tolkien estate’s suit is an attempt “extract more compensation for rights it granted to Warner’s predecessors-in-interest more than four decades ago.” They say the Tolkien estate never voiced any objection until late 2010, and that they accepted royalty payments from the exploitation of the Tolkien properties “and they continue to do so today.”

The studios also say that the estate confirmed Zaentz’s holding of rights to videogames at several points in the 1990s, including one point in 1996 when HarperCollins, which joined the Tolkien estate in its suit, “conceded” that Zaentz’s position was correct.

The studios suggest that the dispute lies in a 2010 agreement in which the Tolkien estate regranted rights to “The Hobbit” and “Lord of the Rings.” Warner Bros. and New Line contend that to “the extent the 1969 agreements did not originally convey rights to online videogames, the agreements were amended in 1998 to convey online videogame rights and those rights were similarly regranted to Zaentz in 2010.” They claim that after the 2010 agreement was signed, the Tolkien estate and others “wanted yet another multimillion-dollar payday for online rights.”

Warner Bros. and New Line’s counterclaim asserts that the Tolkien estate is breaching its agreement, and are seeking a declaration that they can exploit online titles and gambling games.

The Zaentz Co. filed its own counterclaim, which not only asserts that Zaentz holds the online rights but was given the right to register for an array of trademarks related to the Tolkien works. “Zaentz has spent over 35 years, and over $30 million, in its efforts to register and protect the Tolkien marks worldwide,” Zaentz’s counterclaim states. “Zaentz currently owns approximately 5,620 active registrations and pending applications for the Tolkien marks throughout the world.”

The Tolkien estate had no immediate response, but is expected to counter the counterclaims.

Meanwhile, Asylum’s parody “Age of Hobbits,” which was to be released just three days before the Dec. 14 release of Warner Bros. and New Line’s “The Hobbit: An Unexpected Journey,” lost an effort to claim that the word “hobbit” could be used in the title. Asylum noted that the word “hobbit” appeared in a list of supernatural creatures in “The Denham Tracts,” a publication from 1895, and therefore did not earn the same level of trademark protection.

But Gutierrez wrote that this “single example of the use of the term in a publication released decades before Tolkien introduced the hobbit characters to the world of popular fantasy fiction does not change the court’s conclusion that the mark is fanciful.”

Gutierrez, when granting the restraining order, referenced “further evidence that Asylum intended to deceive viewers” with a line on its DVD packaging: “An epic fantasy adventure in the tradition of ‘Clash of the Titans’ and ‘300.’?”

Both, the judge noted, are Warner Bros. movies. And he said that “Age of Hobbits” “does not contain a single reference to hobbits or use of the term ‘hobbit’ at any point than in the title.” He said that he was “not persuaded that these similarities are in fact coincidences.”

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