Complaint In Copyright Infringement Suit Brought By J.R.R. Tolkien Estate Against Manufacturer Of Slot Machines And Other Electronic Games Based On Lord Of The Rings
Professor J.R.R. Tolkien wrote the literary works "The Hobbit" and "The Lord of the Rings" (the works). Fourth Age Limited and The J.R.R. Tolkien Estate Limited were successors to Tolkien with respect to his copyright interests in his works. HarperCollins Publishers, Ltd. was the worldwide exclusive licensee of the publishing rights for the works. On July 8, 1969, the Estate and Fourth Age's predecessor Sassoon Trustee and Executor Corporation, Ltd. and HarperCollins' predecessors George Allen & Unwin (Publishers) Ltd. entered into two agreements with United Artists Corporation regarding motion picture rights. United received rights to make films based on the books and obtained certain limited merchandising rights in connection with the works, with United allegedly provide rights to use the works to produce tangible personal property objects only. The agreement was amended in 1976 and 1981. In 1976, The Saul Zaentz Company d/b/a Middle-earth Enterprises acquired from United all its rights under the 1969 agreement. New Line Productions, Inc. succeeded to many of Zaentz's rights under the agreements and produced and distributed three films based on "The Lord of the Rings." In 2008, New Line merged with and/or became wholly owned subsidiaries of Warner Bros. Entertainment, Inc.
In 2010, Fourth Age and the Estate learned of an online slot game based on the works and the first film that was developed and licensed by Warner Bros. Fourth Age and the Estate subsequently learned of a "Lord of the Rings" casino slot machine that featured characters, events and imagery from the work and allowed online interaction. In addition, Warner Bros. and its affiliates had developed, licensed and sold downloadable video games based on the works, and were applying for trademarks for items allegedly beyond the scope of their licensing agreement. Warner Bros. was sent written notice its actions violated the parties' 1969 agreement, it had materially breached the licensing agreement by manufacturing and distributing games and products that were not tangible personal property covered by the parties' agreements, and it was encroaching on merchandise areas reserved to Fourth Age and the Estate.
On Nov. 19, 2012, Fourth Age, the Tolkien Estate, Priscilla May Ann Reuel Tolkien, as trustee of the Tolkien Trust, HarperCollins, and George Allen and its wholly owned subsidiary Unwin Hyman Ltd. filed suit against Warner Bros. Entertainment, Warner Bros. Home Entertainment, Inc., its divisions Warner Bros. Digital Distribution, Inc. and Warner Bros. Interactive Entertainment, Inc., and its subsidiary Warner Bros. Consumer Products, Inc., Warner Bros. Entertainment subsidiary New Line Productions, Inc., and Zaentz in the United States District Court for the Central District of California. The plaintiffs asserted claims of copyright infringement, breach of contract, declaratory judgment regarding gambling games and downloadable games allegedly beyond the scope of merchandising license, and declaratory judgment regarding extra-contractual trademark, service marks, and services licensing activity.
The defendants denied any wrongdoing and filed counterclaims of breach of contract and declaratory judgment. The Warner defendants asserted the parties' agreements granted broad rights, it had developed and sold online video games and gambling games based on the works for years with no complaint from the plaintiffs, the plaintiffs had accepted royalty payments for the games, and no objection was made until late 2010. Warner also noted the Estate had specifically stated it had rights to make video games on multiple occasions. Warner also noted the parties entered into a regrant agreement in 2010, which regranted to Zaentz all rights in the works that had been previously granted in 1969. Warner argued the plaintiffs' actions in immediately claiming video games were not covered by the agreement breached the regrant agreement and was simply an attempt to extract additional sums for rights and/or to take back rights Zaentz was already granted.
The case was assigned to Judge Andre Birotte, Jr. The parties reached a full settlement, and a stipulation to dismiss the entire case with prejudice was filed on June 30, 2017.
Fourth Age is represented by Bonnie E. Eskenazi of Greenberg Glusker Fields Claman & Machtinger LLP. Warner Bros. is represented by Daniel Petrocelli of O’Melveny & Myers LLP. Saul Zaentz Co. is represented by John Ulin of Arnold & Porter LLP.
Lexis Advance® subscribers can view the complete summary here: Fourth Age Limited, a United Kingdom corporation, et al. v. Warner Bros. Digital Distribution, Inc., a division of Warner Bros. Home Entertainment, Inc., a Delaware corporation, et al; 2017 Jury Verdicts LEXIS 1965.
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