Warner Bros. Countersues Tolkien Estate Over ‘Hobbit’ Games

The studio says the "Lord of the Rings" author's estate has cost it millions and hurt "The Hobbit" by not allowing it to license online slot machines

Warner Bros. has sued the estate of author J.R.R. Tolkien, claiming it has blocked the studio from making millions of dollars in licensing fees on online slot machines and games based on “The Hobbit” and “Lord of the Rings”

The charges came in an amendment to a countersuit filed Monday in U.S. District Court in Central California. 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.

Warner Bros., represented by attorney Daniel Petrocelli, is now demanding damages for what it claims is 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 Saul 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.

Also read: 'The Hobbit: An Unexpected Journey' Hits $1B at Worldwide Box Office

Bonnie Eskenazi, attorney for the Tolkien estate, called the Warner Bros. claims "a classic example of studio bullying tactics."

"The Tolkiens and HarperCollins filed this lawsuit in order to force Warner Bros. and Zaentz to live within the boundaries of the contract to which they agreed," Eskenazi said.

"The amended counter-claims by Warner Bros. and Zaentz are simply an attempt to punish the Tolkiens and HarperCollins for having the nerve to stand up to the studios and tell them that they can’t take more rights than were granted to them by contract," she said.  "Luckily, the law protects people like the Tolkiens and HarperCollins from these kinds of intimidation tactics."

Warner and Zaentz base their claims on their status as successors to merchandising rights to “The Hobbit” and the “Lord of the Rings,” which they say was established in a 1969 agreement. The studio also points out that it has been utilizing the rights for years, and that Zaentz's rights to online video games were affirmed by the Tolkien estate 16 years ago.

"Because of the repudiation,” the studio's filing said, “Warner has not entered into license agreements for online games and casino slot machines in connection with 'The Hobbit' — a form of customary exploitation it previously had utilized in connection with the 'Lord of the Rings' trilogy — which has harmed Warner both in the form of lost license revenue and also in decreased exposure for the 'Hobbit' films."

The “Rings” franchise has seen its share of litigation over the years.

In 2009, Warner Bros. settled a suit filed by HarperCollins and the Tolkien estate alleging underpayment on the “Lord of the Rings” trilogy, which took in nearly $3 billion at the worldwide box office.

Also read: New Line Settles 'Lord of Rings' Dispute with Tolkien Trust

In 2005, director Peter Jackson settled with Warner Bros.' New Line unit over claims he wasn't paid properly.

Zaentz, who at one point owned the film rights to the Tolkien books, has also sued New Line over profit participation. In December 2007, he filed a suit claiming New Line wouldn't give Zaentz's auditors records so that the producer could conduct an audit to verify his profit participation statements.

Pamela Chelin contributed to this story