The estate of author JRR Tolkien is suing the producers of The Hobbit alleging that The Lord of the Rings and The Hobbit merchandising infringes copyright.
The £50m ($98 million NZD) lawsuit filed by Tolkien estate trustees and publisher HarperCollins against Warner Bros, its subsidiary New Line Cinema and Saul Zaentz Comapny's Middle-earth Enterprises was filed in Los Angeles yesterday, just one week out of the premiere of The Hobbit.
The lawsuit alleges causes of action for copyright infringement, breach of contract and declaratory relief.
It alleges that the studios have infringed the copyright granted to them by releasing gambling games and online video games based on Tolkien's inventions.
"They have also asserted and continue to assert that they have rights relating to a wide variety of goods and services beyond 'articles of tangible personal property' and have registered trademarks and/or filed 'intent to use' applications in those same categories, including without limitation hotels, restaurants, travel agencies, ringtones, online/downloadable games and housing developments categories of rights which plainly have not been granted to them," the lawsuit cites.
It claims that 1969 sale of film rights granted "limited merchandising rights" to the right to use the characters, places, objects and events referred to in The Lord of the Rings and The Hobbit.
These limited rights included the right to sell "tangible" products such as "figurines, tableware, stationery items, clothing, and the like", the lawsuit cites.
"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."
It said that the sales of legitimate Tolkien-related merchandise were hugely in demand and had over the years generated millions of dollars in revenue.
"However, in recent years, and particularly in the aftermath of 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 rights which belong exclusively to plaintiffs," the suit reads.
The Tolkien estate and HarperCollins said they have engaged in lengthy settlement discussions and say they have "done everything in their power to appeal to defendants to stop this unlawful exploitation without resort to litigation."
However, the "defendants have made it abundantly clear that they have no intention of ceasing their infringing and wrongful conduct".
The suit also states that then has been uproar from fans over The Lord of the Rings casino gaming, with many believing the estate had assented to the commercialisation of the Tolkien works.
"This infringing conduct has outraged Tolkiens devoted fan base, causing irreparable harm to Tolkiens legacy and reputation and the valuable goodwill generated by his works," the suit says.
The estate is claiming $98 million in damages. It is also asking for an injunction on the alleged infringing products.
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