On Wednesday, July 5th, a federal judge in the U.S. District Court for the Central District of California (C.D. Cal.) entered an order granting the dismissal of a copyright case which had been filed by the estate of famed English fantasy author J. R. R. Tolkien against American entertainment company Warner Bros. The case arises out of the Tolkien estate’s allegations that Warner Bros. was in breach of contract in using their merchandising rights to The Lord of the Rings and The Hobbit to develop video games based on those properties.
The original complaint filed by the Tolkien estate in November 2012 notes that when the film rights to The Lord of the Rings and The Hobbit were sold in 1969, they included a limited right to use characters, places, objects and events referred to in the literary properties to merchandise tangible personal property other than paperback books or other published materials. According to the suit, the Tolkien estate reserved the right to “utilize and/or dispose of all rights and/or interests not herein specifically granted” as part of the terms of the rights being sold.
“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,” the original complaint reads. According to the Tolkien estate, the merchandising rights held by Warner Bros. did not give them the right to create downloadable video game properties based on the films.
Further, the estate was aggravated by Warner Bros. decision to developing gambling games for online and casino locations, a category that the Tolkien estate never intended to exploit. “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,” the suit reads. Tolkien also noted comments which were made about the gambling games which were called by some “a nasty, greedy, ugly act” while another person opined that the gambling games were essentially “prostituting art.”
The original complaint filed by the Tolkien estate includes four claims for relief including claims for copyright infringement, breach of contract, declaratory judgment that gambling and downloadable games were beyond the scope of the merchandising license, and declaratory judgment of extra-contractual trademark, service marks and services licensing activity. The suit’s prayer for relief originally sought damages in excess of $80 million as well as permanent injunctive relief from the court. The terms of the recent settlement, which resolves all counter-claims raised in the case, were not disclosed by any party in the case.