LOS ANGELES (CN) - Years after paying the heirs of J.R.R. Tolkien a Hobbit-sized pittance from the "Lord of the Rings" trilogy's $3 billion box office, Warner Bros. faces another lawsuit from the Tolkien estate - for creating and licensing Middle-Earth-inspired casino games.
The Tolkiens say their devoutly religious father never would have approved of using his creations in slot machines; that moviemaker Saul Zaentz Co. is illegitimately claiming trademark in "paper goods and printed matter;" and that whatever rights the defendants do own are for "tangible products," which do not include downloads or electronic games.
Plaintiffs Fourth Age Ltd., Priscilla Tolkien, the J.R.R. Tolkien Estate, and publishers HarperCollins, Unwin Hyman, and George Allen & Unwin sued Warner Bros. Digital Distribution and several Warner subsidiaries, New Line Productions, and the Saul Zaentz Co., in Federal Court.
The Tolkiens claim that when they sold the film rights to "The Lord of the Rings" and "The Hobbit" to United Artists in 1969, they granted limited merchandising rights for tangible products which "did not include any grant of exploitations such as electronic or digital rights, rights in media yet to be devised or other intangibles such as rights in services."
Defendant Saul Zaentz acquired the rights to the trilogy - but not "The Hobbit" - from United Artists in 1976.
Fast-forward 30 years, and the Tolkiens say Hobbit-inspired merchandise has generated millions of dollars worldwide, spawned by the success of director Peter Jackson's films in the early 2000s.
The Tolkien family took Warners subsidiary New Line Cinema to court in 2008, seeking $150 million in unpaid profit sharing; the parties settled a year later for an undisclosed amount.
"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 - rights which belong exclusively to plaintiffs," the complaint states. "For example, although their limited merchandising license only gives them the right to sell tangible merchandise, defendants have developed, licensed and/or sold (and continue to develop, license and/or sell) downloadable videogames based on 'The Lord of the Rings' and 'The Hobbit,' available only by downloading and/or access via the Internet, via mobile apps, tablet apps or other similar digital distribution channels, or through other online interconnectivity such as Facebook. There is no physical or tangible item of merchandise sold to the consumer with these games. Defendants also have asserted and continue to assert that they have rights relating to a wide variety of goods and services beyond 'articles of tangible personal property' and have registered trademarks and/or filed 'intent to use' applications in those same categories, including without limitation hotels, restaurants, travel agencies, ringtones, online/downloadable games and housing developments - categories of rights which plainly have not been granted to them."
The Tolkiens say their father - a devout Roman Catholic - would not have approved of Warner Bros.' latest merchandising plans for "The Hobbit," which is to be released on Dec. 14.
"To make matters worse, plaintiffs discovered that defendants have, in excess of the limited rights granted to them, begun licensing the production and distribution of gambling games (both over the Internet and in brick-and-mortar casinos) featuring characters and story elements from 'The Lord of the Rings.' Gambling constitutes a further category of rights which have never been granted to defendants (and which plaintiffs themselves would intend never 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. Fans have publicly expressed confusion and consternation at seeing 'The Lord of the Rings' associated with the morally questionable (and decidedly non-literary) world of online and casino gambling. Rampant are comments such as 'I actually feel angry about this ... this insults Tolkien ... [and] is a nasty, greedy, ugly act ... Whoever is responsible should be ashamed of themselves,' and 'if this isn't prostituting art, I don't know what is.' The damage to the goodwill that plaintiffs have painstakingly cultivated over the decades is patent," the Tolkiens say.
The plaintiffs say they have "done everything in their power," including lengthy settlement discussions with Warner Bros., to stop the exploitation of the Tolkien name.
"Defendants have made it abundantly clear that they have no intention of ceasing their infringing and wrongful conduct," the Tolkiens say in their complaint.
Tolkien attorneys discovered Warner Bros.' foray into gambling when they stumbled across a "Lord of the Rings: Fellowship of the Ring: Online Slot Game" in 2010. Since then, the Tolkiens say, Warners has licensed WMS Gaming to create a "Lord of the Rings"-themed casino slot machine which has begun appearing in casinos worldwide.
WMS Gaming is not a party to this lawsuit.
In addition to the slot machines and download-only computer games, the Tolkiens say that Zaentz and Warner Bros. have begun expanding their Hobbit-related trademarks, precluding the Tolkien Estate from exercising its own superior trademark rights - particularly in the one area of merchandising that has been off-limits in every negotiation and agreement since 1969: printed publications.
"Zaentz has unlawfully registered as the owner of trademarks in International Class 16 (paper goods and printed matter), with the effect thereby of excluding plaintiffs from registering their own legitimate trademarks in that class," the Tolkiens say in their complaint. (Parentheses in original.)
With two more "Hobbit" films in the pipeline, for 2013 and 2014, the Tolkiens and Warner Bros. will likely tangle in court again. In July, Tolkien's son Christopher told the French newspaper Le Monde that he can't bear to look at what Hollywood has done to his father's work.
"They eviscerated the book by making it an action movie for young people aged 15 to 25, and it seems that 'The Hobbit' will be the same kind of film," Tolkien told Le Monde. "Tolkien has become a monster, devoured by his own popularity and absorbed by the absurdity of our time. The chasm between the beauty and seriousness of the work, and what it has become, has gone too far for me. Such commercialization has reduced the aesthetic and philosophical impact of this creation to nothing. There is only one solution for me: turning my head away."
The plaintiffs seek more than $80 million in damages for copyright infringement, breach of contract and trademark infringement.
They are represented by Bonnie Eskenazi, with Greenberg Glusker Fields Claman & Machtinger.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.