Trouble in Middle-Earth: Tolkien Estate sues Film Producers over Copyright Infringement and Breach of Contract

After the big success of The Lord of the Rings trilogy, it is now time for the first of the three upcoming films based on the other classic Tolkien book: The Hobbit. Bilbo Baggins, the head character of the movie, is going to start with an unexpected journey through Middle-Earth. But, one week before the premiere in Wellington and two weeks before the first film of this trilogy hits theaters worldwide, the Tolkien estate has filed a lawsuit in the U.S. Central District Court of California. The estate is suing the film’s producers, Warner Brothers and partners, on the grounds of copyright infringement and breach of contract. The estate claims that Warner Brothers and partners are overstepping their merchandising rights when using characters of The Lord of the Rings and The Hobbit in downloadable video games and online gambling games.

Unfortunately, this was not the only claim against Warner Brothers during the filming of The Hobbit. Maybe we can literally speak of an unexpected journey?

In this blog I will mainly focus on Tolkien’s lawsuit against Warner Brothers that overstepped its merchandising rights last week. I will start with a description of the claim on copyright infringement and breach of contract. Then I will provide an overview of the other claims against Warner Brothers while filming The Hobbit. And finally, I will conclude with a claim from Warner Brothers itself, because last month they were also on the other side of a lawsuit which makes the trouble in Middle-Earth even worse.

Tolkien’s claim

On Monday the 19th of November 2012 the Tolkien estate, the legal body which manages the property of the English writer J.R.R. Tolkien and the copyright in his works, and Tolkien’s book publisher HarperCollins have filed an $80 million lawsuit in the U.S. District Court of California against Warner Brothers. They claim that Warner Brothers has infringed the copyright in the famous books and breached a contract. The Tolkien estate is asking courts to define the contractual limits on Warner Brothers marketing rights to The Lord of the Rings and The Hobbit, stating that the original marketing rights only included tangible property (physical products). The history of these merchandising rights began in 1969 and the agreement reads that the studio can only create tangible merchandise based on the books and that digital products are beyond the scope of the contract.

The online gambling games and downloadable video games are particular offenders, but the suit also names a number of other non-tangibles: ringtones, downloadable apps, as well as hotels, restaurants and amusement parks. The Tolkien estate sold their merchandise rights to Warner Brothers and partners, but they say they only agreed with the creation of tangible products (for example costumes and DVD’s). Anything else that might claim a Lord of the Rings or Hobbit experience goes too far in Tolkien’s opinion. The problem is that merchandising is a multibillion dollar business and hence the question how these commercial activities can be protected is always of great importance.

Of course, the book author also thinks that gambling and downloadable games are causing harm to the legacy and reputation of Tolkien. It does not represent the books of The Lord of the Rings and The Hobbit. On the 14th of December the Court will make its decision in this question and we will know whether the Hollywood business has to pay for the damage and how much.

Other claims against Warner Brothers

Peter Jackson’s The Hobbit has recently found itself in the centre of controversy because the first claim mentioned is not the only form of trouble. During the filming of The Hobbit, Jackson had some problems with local trade unions in New Zealand. Luckily, the government of New Zealand changed the law so that the Warner Brothers production could stay. But they almost had to leave the country.

The other problem came from a complete different group. A couple of weeks ago the animal rights group (PETA) said that 27 animals were killed during the filming of The Hobbit in New Zealand. Later, the American Humane Association and Jackson himself admitted that no animals were killed during the actual filming, but they acknowledged that some animals did die due to the conditions of the place they were housed.

Warner Brothers on the other side

Last month, Warner Brothers was also on the other side of a lawsuit accusing a small production company, Asylum, of trademark infringement over its upcoming film Age of the Hobbits. The question at the center of this suit was: who owns the word ‘Hobbit’? Warner Brothers said that the studio violated the trademark in the protected phrase. The word ‘Hobbit’ has referred only to Bilbo Baggins since the Tolkien novel was first published in 1937. Asylum studio argued that the word used in Age of the Hobbits referred to another fictional character. Of course, this all can confuse consumers and that was exactly the point of Warner Brothers. In the end, Asylum changed the title of the film to American Warships.

Controversies aside, there is still great anticipation for Jackson’s upcoming film The Hobbit and I am very sure it is going to be a success. In the end of July I also wrote about intellectual property, copyright and trademarks. It is an interesting business. Especially when you think about the fact that even bars in the United Kingdom have to ask permission to carry the name ‘The Hobbit’. But let us hope for now that the claims will soon come to an end; so that we can watch Bilbo Baggins in his own Middle-Earth and with his own troubles.

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