An ongoing dispute between Warner Bros. Studios and the J.R.R. Tolkien estate has taken a dramatic turn, with millions of dollars of merchandizing tied to the "Hobbit" and "Lord of the Rings" franchises in the balance.
In November 2012, Tolkien's heirs filed suit against Warner Bros., claiming the studio was exceeding the limits of their merchandising rights for the Middle Earth characters. But on Tuesday Warner Bros. hit back with an aggressive countersuit, insisting Tolkien's estate have not only attempted to scuttle deals that Warner Bros. were entitled to make, but now owe WB for the potential lost revenue.
The squabble was triggered by a "Lord Of The Rings: The Fellowship Of The Ring" online slot machine game, which became available in 2010. Tolkien's estate insisted that Warner Bros. had no rights to market the game, as the terms of their deal - an extension of an agreement struck when producer Saul Zaentz purchased the film rights to the books in 1969 - only covered "tangible" merchandise, with digital gaming falling outside those boundaries.
But Warner Bros. attorney Daniel Petrocelli has filed a suit that claims the Tolkien Estate affirmed to Zaentz sixteen years ago that online video games were included in his merchandising rights, and Tolkien's actions have hurt the studio. Warner Bros. and Petrocelli cited a deal they had struck with WMS Gaming to manufacture 'Hobbit'-branded slot machines that was abandoned due to the Tolkien suit.
Papers filed by Warner Bros. read in part, "Because of the repudiation, Warner has not entered into license agreements for online games and casino slot machines in connection with 'The Hobbit' - a form of customary exploitation it had previously utilized in connection with the 'Lord Of The Rings' trilogy - which has harmed Warner both in the form of lost license revenue and also in decreased exposure for the 'Hobbit' films."
While the Tolkien estate were asking for $80 million in damages against Warner Bros., there's been no confirmation on what figure WB is asking from Tolkien's estate and their publishers. An attorney for the Tolkien estate, Bonnie Eskanazi, told the press that she intended to file a motion to dismiss Warner Bros.' new lawsuit, and that WB could not sue Tolkien simply for suing Warner Bros.