WB Hobbit Lawsuit
The estate of Lord of the Rings author J.R.R. Tolkein has sued Warner Brothers, producers of the upcoming trilogy of Hobbit movies, for copyright and trademark infringement over an alleged breach of the original 1969 contract that assigned merchandising rights to Tolkein’s novels. The Tolkein estate is demanding funds in excess of $80 million, and is asking the court to order WB to cease all allegedly infringing uses of the works and for all such works to be recalled from the market.
The estate claims that back in 1969, the producers (actually, their predecessors) were granted:
the limited right to use the characters, places, objects and events referred to in The Lord of the Rings and The Hobbit “solely and only upon and in connection with the manufacture, sale and distribution of … any and all articles of tangible personal property, other than novels, paperbacks and other printed published matter…” (emphasis added). The original contracting parties thus contemplated a limited grant of the right to sell consumer products of the type regularly merchandised at the time (such as figurines, tableware, stationery items, clothing, and the like). 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. 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.”
They go on to allege that WB has exploited the LOTR brand for all sorts of goods and services that don’t qualify as tangible personal property. The most contentious item appears to be WB’s use of the LOTR characters on an online slot machine as well as in physical casino games, as seen in this video:
From the estate’s legal filing:
Not only does the production of gambling games patently exceed the scope of defendants’ rights, but this infringing conduct has outraged Tolkien’s devoted fan base, causing irreparable harm to Tolkien’s legacy and reputation and the valuable goodwill generated by his works. Fans have publicly expressed confusion and consternation at seeing The Lord of the Rings associated with the morally-questionable (and decidedly non-literary) world of online and casino gambling.
They go on to cite issues with the various video games and other services put out by WB.
Were Tolkein’s heirs really shocked and dismayed by the use of his characters on casino games? Or was this just a convenient peg on which to hang the lawsuit, which happened to have been filed a few weeks before the premiere of WB’s latest Middle Earth blockbuster? We may never know, but it does appear, based on the estate’s claims, that WB has pushed their licensing rights beyond what was contemplated in the original documents.
I’m sure we’ll see more about this story in the coming weeks. These parties have previously settled lawsuits over the rights to Tolkein’s creations. However, there is an important moral to this epic saga: be very careful when you’re creating products and services under a licensing agreement. Making sure that you’re not expanding the scope of the license can save a great deal of cost and possibly spare some PR embarrassment as well.