Victory for Warner Bros. in ‘Hobbit’ Legal Battle with Tolkien Estate

Judge rejects bid by author's heirs to dismiss counterclaims by studio, Saul Zaentz

Warner Bros. has won a round in its ongoing battle with the estate of J.R.R. Tolkien over ancilliary profits from “The Lord of the Rings” and “The Hobbit.”

A federal judge on Thursday rejected the estate’s bid to dismiss a counterclaim by the studio and the Saul Zaentz Co. that said they had lost millions of dollars in licensing and merchandising fees because the Tolkien camp filed a legal challenge over their right to use the movies’ characters in slot machines and online games.

“These claims arise out of the parties' divergent understanding of the Warner Parties' and Zaentz's rights to ‘The Lord of the Rings’ and ‘The Hobbit.’ They are routine, contract-based claims and counterclaims,” wrote U.S. District Judge Audrey Collins in her ruling.

Also read: Warner Bros. Countersues Tolkien Estate Over 'Hobbit' Games

The Tolkien estate and its book publisher HarperCollins in November filed an $80 million suit against the producers of the films, claiming that they had infringed upon their copyrights.

The studio and Zaentz fired back with their own legal action in March, demanding damages for what they claim was a breach of contract from the estate of Tolkien, who died in 1973. The studio claims it lost money not only because it hasn't been able to sell the game rights, but that because the games weren't available, the film's exposure suffered.

The studio's claims parallel those of producer Zaentz, another rights holder on the “Rings” and “Hobbit,” who in January filed a similar counterclaim, alleging that the Tolkien estate has breached an implied understanding of good faith.

Pamela Chelin contributed to this report.