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Hobbits Mockbuster Relegated Back to Shire

PASADENA, Calif. (CN) - A Burbank production company that was slammed for its straight-to-DVD knockoff of "The Hobbit" failed win a reversal in the 9th Circuit.

Last year, Warner Bros. Entertainment, New Line Cinema, New Line Productions, Metro-Goldwyn-Mayer Studios and The Saul Zaentz Co. sued Global Asylum aka The Asylum of Burbank for trademark infringement.

At issue was the straight-to-DVD movie, "Age of the Hobbits," featuring cover art the studios said had a similar look and feel as art used to promote its multibillion "Lord of the Rings" franchise.

The $2 million Asylum release was timed to create confusion and piggyback on the studios' marketing and publicity for Peter Jackson's "The Hobbit: An Unexpected Journey," the studios claimed.

Asylum, though, insists its movie is about an extinct subspecies of humans called homo floresiensis. The species was small enough to earn the nickname "hobbit" by some in the scientific community. Nine skeletal remains of this species were found in 2003 on the island of Flores in Indonesia.

In their complaint, the studios noted Asylum's tendency for making "mockbusters," citing cash-ins on Hollywood hits "Transformers," "High School Musical," "The Da Vinci Code," and "Sherlock Holmes."

In January, U.S. District Judge Phillip Gutierrez enjoined Asylum from distributing its film under "Age of the Hobbits" or any other "confusingly similar" title.

That ruling further barred Asylum from using "The Hobbit" marks on the DVD disc, packaging or marketing materials.

Earlier this month, Asylum tried to persuade a skeptical 9th Circuit panel that nominative fair use shields the company under trademark law. Under the legal doctrine, Asylum is permitted to use the studios' trademark because its movie is not identifiable without it, the producer argued at a hearing on Oct. 7.

A three-judge panel of the 9th Circuit disagreed Wednesday, ruling that the nominative fair use defense was properly rejected.

"Asylum contends that members of the species homo floresiensis were nicknamed 'Hobbits' by scientists and journalists in reference to Tolkien's characters," the unsigned and unpublished memorandum states. "The district court properly recognized that a nominative fair use defense is not available because Asylum used the 'Hobbit' mark in the title Age of the Hobbits to refer to Asylum's product and not the studios' product."

The court of appeals rejected the contention that the injunction is too broad, and refused to grant Asylum's request to modify the court order so it can use the marks in a way that conforms with a lawful fair use.

"Asylum did not propose to the district court or this court specific language or suggestions regarding how the injunction should be modified to allow nominative use of the protected trademarks while prohibiting Asylum's infringing uses," the four-page opinion states. "Accordingly, the district court did not abuse its discretion in granting the preliminary injunction as requested by the studios instead of tailoring it to authorize permissible nominative fair use of the protected marks."

New Line owns the rights to "The Lord of the Rings" film trilogy, based upon J.R.R. Tolkien's bestselling novels. The next installment in "The Hobbit" trilogy, "The Desolation of Smaug," is due out December.

Judge Ferdinand Francis Fernandez, Judge Richard Paez and Judge Andrew Hurwitz issued the opinion.

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