‘The Lord of the Rings’ Legal Tangle Takes on a New Twist

In the latest movement in a dispute over the merchandising rights to “The Lord of the Rings,” attorneys for Warner Bros. are claiming that the law firm representing the estate of J.R.R. Tolkien has “invaded” attorney-client privilege by hiring previous studio lawyers as expert witnesses.

But attorneys for the Tolkien estate say that the claims are being made “for purely tactical and strategic reasons.” Last month, a federal judge ordered the studio and fellow defendant Saul Zaentz Co. to turn over a document that the estate’s attorneys have said is “devastating” to the Warner Bros-Zaentz Co. defense.

The dispute centers on the Tolkien estate’s claims that Warner Bros. and the Zaentz Co. overstepped merchandising agreements by licensing the lucrative “Lord of the Rings” and “Hobbit” franchise for online games.  The estate, along with Harper Collins Publishers, filed suit in 2012, and contends that a 1969 agreement gives Warner Bros and the Zaentz Co. the rights only to tangible games, not virtual merchandise.

The discovery process has been acrimonious.

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On Tuesday, Warner Bros.’ legal team went so far as to file a motion to disqualify Greenberg Glusker as the firm representing the Tolkien estate.

In the motion filed by Daniel Petrocelli of O’Melveny & Myers, representing Warner Bros., the studio claims that Greenberg Glusker “impermissibly gained access to privileged information” in violation of rules of professional conduct.

A significant part of the case is the interpretation of a 1969 agreement in which rights to the Tolkien properties were granted to United Artists, which later granted them to Warner Bros. and Zaentz.

Warner Bros.’ claim is that Greenberg Glusker attorneys contacted Alan Benjamin and William Bernstein, who represented UA as inhouse lawyers at the time, to serve as expert witnesses, offered to represent them for free as “percipient witnesses” and “had direct communications with them.” The motion claims that Greenberg Glusker hired Benjamin as an expert and paid him $10,000.

“In doing so, Greenberg invaded the attorney-client privilege now held by MGM, which controls UA, positioning UA’s former lawyers to be adverse to the interests of MGM and UA’s successors-in-interest, Warner and Zaentz,” the motion states.

Warner Bros. claims that Greenberg Glusker violated prohibitions on representing conflicting interests, and “improperly incentivized” Benjamin and Bernstein to disclose privileged information.

Greenberg Glusker’s Bonnie Eskenazi said, “There is absolutely no basis for the motion. Greenberg Glusker has acted properly in all respects. The motion was field for purely tactical and strategic reasons, and we look forward to the court vindicating our positions.”

A hearing on the motion is scheduled for July 7.

Last month, U.S. District Judge Audrey Collins refused to overturn a magistrate judge’s ruling that Warner Bros. and Zaentz Co. produce a Zaentz Co. document from 1997. It is a business proposal from gamemaker Sierra Online to Laurie Battle, then the Zaentz Co.’s director of licensing. According to the Tolkien estate, the proposal describes Sierra Online’s plans to sell an online video game via a “boxed game through retail outlets,” In the margin of her copy, Battle wrote “*tangibility.”

The Tolkien estate contends that the document is evidence that Zaentz “always fully understood” that the 1969 agreement limited them to tangible merchandising, and that a videogame had to have some kind of a physical element.

Even though Warner Bros. and Zaentz Co. claimed that the document was privileged, and that the notation was merely Battle’s reminder to seek legal advice, the court rejected that argument.

Meanwhile, the Tolkien estate is appealing Collins’ decision last year to let Warner Bros. and the Zaentz Co. proceed with a countersuit, in which they claim that the plaintiffs are repudiating earlier agreements and are in breach of contract.





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