Warner Bros. claims that the Tolkien Estate has breached their contract.
First, the Tolkien Estate sued The Lord of the Rings and The Hobbit producers, including Warner Bros. for breaching the written contract. Second, the Saul Zaentz Co., rightsholder to The Lord of the Rings and The Hobbit, claimed that the Tolkien Estate has breached an unwritten agreement. Now, Warner Bros. counter-sues the Tolkien Estate!
In case you have not heard the whole story, I will will start at the beginning. Back in November, 2012, the Tolkien Estate and its book publisher HarperCollins filed an $80 million dollar lawsuit against Middle-earth Enterprises, New Line Cinema, and Warner Brothers, claiming they had infringed the copyright on the books and overstepped the bounds determined by their contract.
In retaliation, the Saul Zaentz Company, which has held the worldwide exclusive rights to The Lord of the Rings and The Hobbit since 1976, made a counterclaim, saying that the Tolkien Estate has breached an unwritten agreement of good faith and fair dealing.
Warner Brothers, represented by attorney Daniel Petrocelli, has gone a step further. The studio is demanding damages for loss of license revenue. Warner Bros. had planned to enter into license agreements for Hobbit-themed online games and casino slot machines, but was unable on account of the lawsuit.
In response to this, Bonnie Eskenazi, who represents the Tolkien Estate, said, "The defendants’ amended counterclaims are nothing more than an effort to sue the Tolkiens and HarperCollins for suing them. They are entirely without merit and are a classic example of studio “bullying tactics.” The Tolkiens and HarperCollins filed this lawsuit in order to force WB and Zaentz to live within the boundaries of the contract to which they agreed. WB’s and Zaentz’s amended counterclaims are simply an attempt to punish the Tolkiens and HarperCollins for having the nerve to stand up to the studios and tell them that they can’t take more rights than were granted to them by contract. Luckily, the law protects people like the Tolkiens and HarperCollins from these kinds of intimidation tactics."
Source: The Hollywood Reporter