The Tolkien Estate is the legal body which manages the property of the English writer J. R. R. Tolkien, including the copyright for most of his works. The individual copyrights have for the most part been assigned by the Estate to subsidiary entities such as the J. R. R. Tolkien Discretionary Settlement and the Tolkien charitable Trust. The various holdings of the Tolkien family, including the Estate, have been organised under The Tolkien Company, the directors of which are Christopher Tolkien, his wife Baillie Tolkien, and J. R. R. Tolkien's grandson Michael George Tolkien. The executors of the Estate proper are Christopher Tolkien, who is sole literary executor, and (succeeding J. R. R. Tolkien's lawyer Frank Williamson) Cathleen Blackburn of Maier Blackburn, who has also been the Estate's solicitor for many years.
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The lawsuits below refer to an entity entitled Fourth Age, Ltd. which was formed in November 2011. Although court records do not reflect this, according to UK corporate records Fourth Age, Ltd. changed its name on February 21, 2013, to Tolkien Estate, Ltd. Its directors include Tolkien family members Baillie Tolkien, Christopher Tolkien, Priscilla Tolkien, Simon Tolkien and Michael George Tolkien, as well as the Tolkien Estate attorney, Steven Andrew Maier.
Rights to The Hobbit and Lord of the Rings
Exclusive worldwide rights to motion picture, merchandising, stage and other rights in certain literary works of J.R.R. Tolkien including The Hobbit and The Lord of the Rings were sold by J.R.R. Tolkien himself, to United Artists in 1969, and are currently owned by Middle-earth Enterprises (formerly Tolkien Enterprises), inc., a company controlled by Saul Zaentz until his death on Tolkien's Birthday in 2014.
United Artists is reported to have paid Tolkien just over £100 000. It is often repeated that Tolkien sold the rights for a 'pittance' in order to pay a tax bill, the sum he was paid was approximately equivalent to £1,377,000.00 to £3,842,000.00 in 2015 and in addition to it he retained a 7.5% royalty interest in any future adaptation (transmitted to the Tolkien Estate on his death).
In 1976 United Artists sold most of their rights to Tolkien's work to Saul Zaentz Company, who have licensed all subsequent authorized adaptations of The Hobbit and The Lord of the Rings through Middle-earth Enterprises. However United Artists retains the world distribution rights to film adaptations. These are currently exercised by their parent company MGM, which under contract co-financend the The Hobbit film trilogy.
Film royalties
In February 2008, the Tolkien Trust sued New Line Cinema, the studio behind the Lord of the Rings trilogy, for £75 million claiming they had not received "even one penny" from the films. A request for punitive damages was denied in September, 2008 (In March 2008, New Line Cinema became a unit of Warner Brothers Entertainment.). The case was resolved out of court on 8 September 2009, with the terms not made public.
In a press release, Christopher Tolkien stated: " The Trustees regret that legal action was necessary, but are glad that this dispute has been settled on satisfactory terms that will allow the Tolkien Trust properly to pursue its charitable objectives. The Trustees acknowledge that New Line may now proceed with its proposed films of ‘The Hobbit.'”.
Gambling devices
In November 2012, in United States District Court, Central District of California, Fourth Age Limited, the Trustees of the Tolkien Trust, and publishers: Harper Collins Publishers, Ltd., Unwyn Hyman, Ltd. and George Allen and Unwin (Publishers) Ltd. sued Warner Brothers—Warner Brothers Digital Distribution, Inc., a division of Warner Brothers Home Entertainment, Inc., Warner Brothers Entertainment, Inc. as successor-in-interest to New Line Cinema Corp.; Warner Brothers Consumer Products, Inc., Warner Brothers Interactive Entertainment, Inc. -- New Line Productions, Inc., and the Saul Zanetz Company, (doing business as: Middle-earth Enterprises), alleging copyright infringement, breach of contract, and declaratory relief, arguing that the Defendants exceeded the scope of their rights.
The suit alleges that by producing gambling and video games using his characters, the parties ignored the limitations of the rights purchased more than four decades ago in 1969; contending the original licence to Tolkien's works was limited to the right to sell "tangible" products such as "figurines, tableware, stationery items, clothing, and the like", but did not cover "electronic or digital rights, rights in media yet to be devised or other intangibles such as rights in services". Tolkien's estate claimed that the defendants actions had caused "irreparable harm to Tolkien's legacy".
Countersuit
On 11 March 2013, the Saul Zaentz Co., (doing business as Middle Earth Enterprises), the rightsholder for the Lord of the Rings and Hobbit properties, filed an Amended Counterclaim against Fourth Age for declaratory relief, breach of the implied covenant of good faith and fair dealing, and quantum meruit. On the same day, the Warner Parties filed an Amended Counterclaim against Fourth Age for breach of contract and declaratory relief.
The Tolkien Estate et al. attempted to block these countersuits under California's anti-SLAPP statue, claiming that Warner Brothers was interfering with their right to petition under the First Amendment. On 11 July 2013, U.S. District Judge Audrey Collins denied a motion to dismiss, saying what Warner Brothers was doing was making "disguised claims for malicious prosecution" and wrote "these claims arise out of the parties' divergent understanding of the Warner Parties' and Zaentz's rights to The Lord of the Rings and The Hobbit. They are routine contract-based claims and counterclaims." In October 2015, the 9th Circuit Court upheld that ruling.
As of August 2016, the case has yet to go to trial.