"Hobbit" Lawsuit: Warner Bros. Countersues Tolkien Estate, Alleges Breach of Contract Over Gaming Rights

Studio claims it lost millions in royalties.

By Rebecca Macatee
|  Thursday, Mar 14, 2013  |  Updated 8:12 AM PDT
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New "Hobbit" Trailer Lands

Martin Freeman in "The Hobbit: An Unexpected Journey"

Photos and Videos

Ian McKellen Compares "The Hobbit" and "The Lord of the Rings"

Ian McKellen chats with Access about reuniting with director Peter Jackson and some of his former cast mates from "The Lord of the Rings" trilogy in "The Hobbit: An Unexpected Journey." So, how is the camaraderie different from the "LOTR" cast? Plus, Ian laughs when Access tells him co-star Martin Freeman said they all got piercings to commemorate "The Hobbit."

New "Hobbit" Trailer Lands

From director Peter Jackson comes the story of Bilbo Baggins, who is drafted by Gandolf to go on an adventure with 13 dwarves led by Thorin Oakenshield, a journey that will find him face to face with Gollum, and ultimately in possession of the most powerful ring in the world.
More Photos and Videos

Legal battles are not so precious.

Warner Bros. filed a lawsuit against author J.R.R. Tolkien's estate Monday, claiming breach of contract over "The Hobbit" and "Lord of the Rings" licensing opportunities.

In November, it was Tolkien's estate and the his publisher, HarperCollins, that filed an $80 million suit against the studio, alleging they lost out on royalties from ancillary sources of income--including "The Hobbit" online slot machines and games--since selling the film rights in 1969.

Read more about the November "Hobbit" lawsuit

Then in January, per The Hollywood Reporter, the films' rights holder, Saul Zaentz Co., made a counterclaim that Tolkien's estate has breached an implied contract of good faith and fair dealing.

Now, Warner Bros. is alleging that Tolkien's estate's contempt has cost them millions in licensing opportunities and is demanding damages for the alleged breach of contract.

Find out about another Hobbit vs. Hobbit lawsuit

In a lawsuit obtained by THR, the studio claims to be the successors-in-interest in merchandising and other rights because of its 1969 purchase of film rights. Warner Bros. also claims that 16 years ago, Tolkien's estate confirmed the studio had rights to online video games. But in 2010, when a "regrant agreement" was put into place, there was confusion over these rights, which resulted, the studio's suit alleges, in halted plans for Hobbit-themed casino slot machines. "This alone cost Warner millions of dollars in license fees," the lawsuit states.

Bonnie Eskenazi, the Tolkien estate's attorney, told THR that the counterclaims "are nothing more than an effort to sue the Tolkiens and HarperCollins for suing them. They are entirely without merit and are a classic example of studio 'bullying tactics.'"

The Tolkien estate lawyer also claims that the November lawsuit was their way "to force WB and Zaentz to live without the boundaries of the contract to which they agreed" and that the studio's counterclaims "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."

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