Lawsuit by Tolkien Estate may halt The Hobbit

[Mithadan]

The Tolkien Estate is apparently claiming that New Line has failed to pay royalties required by the 1969 licensing agreement that Tolkien signed. Salon.com reports that the Estate is entitled to 7.5% royalties after deduction of 2.9 times the production cost for the LoTR movies and advertising expenses. New Line has apparently paid the Estate nothing and claims it owes nothing. The Estate may claim (or has claimed) that the failure to pay royalties is a breach of the licencing agreement and, as a result, the rights revert to the Estate.

The article discussing this may be found at this link. http://www.salon.com/ent/movies/btm/...es/btm/feature

[Bêthberry]

Well, it doesn't really say "halt" The Hobbit. It suggests there is a struggle to see who controls the profits from such a production. How interesting, though, to have the rights revert back to the Estate.

[PrinceOfTheHalflings]

Originally Posted by Bêthberry

Well, it doesn't really say "halt" The Hobbit. It suggests there is a struggle to see who controls the profits from such a production. How interesting, though, to have the rights revert back to the Estate.

The risk for New Line is that if the case goes to trial they may lose - this could mean not only having to pay out hundreds of millions to the Estate and Harper Collins but ALSO losing the rights to the Hobbit films (which could be worth billions).

I'm surprised that they haven't offered a hundred million (or so) to make this go away.

To be sure, even if New Line lose they can appeal, but it's not like the Tolkien family are paupers. New Line can't prolong this case until the Tolkien's run out of money. New Line would probably go broke before the Tolkien's did!

[Mithadan]

Hmmm. Do I detect the presence of another lawyer on the site?

The real issue seems to be, will New Line want to sink millions into doing preproduction and signing talent for the movie if their rights to distribute it are at all in question?

[Mithalwen]

Several I think (not me), Bill Hicklin & SpM for a start. There have been a couple of threads on this but I recall them becoming bad tempered so I will let them lie.

[davem]

Isn't the latest theory that one of the plaintiffs, Harper Collins' owner Mr R. Murdoch, is hoping that if Warner lose the distribution rights then Fox (coincidentally also owned by Mr M) will inherit them? http://wearemoviegeeks.com/2009/07/f...-hobbit-films/

[PrinceOfTheHalflings]

Originally Posted by Mithadan

The real issue seems to be, will New Line want to sink millions into doing preproduction and signing talent for the movie if their rights to distribute it are at all in question?

Well ... some money has already been sunk into this movie. Guillermo del Toro is involved and he can't be doing it for free. Screenplays are being written.

My understanding is that preproduction goes full speed ahead this September, so yes - it's a hell of a risk if they lose the rights in October.

It would be interesting, to say the least, if the rights reverted back to the Tolkien Estate. I suspect that at this point they (and by 'they' I principally mean CJRT) probably wouldn't kill off the movie, BUT you can imagine the Estate wanting script approval.

Now ... looking at the contract I see that (7.5% of) the movie's gross is split between the Estate and the publishers (after production costs are deducted). So ... does that mean the rights revert back to the Estate AND the publishers in the event of a breach? I'd better have another look.

[Tuor in Gondolin]

It would be interesting, to say the least, if the rights reverted back to the Tolkien Estate. I suspect that at this point they (and by 'they' I principally mean CJRT) probably wouldn't kill off the movie, BUT you can imagine the Estate wanting script approval.

That might not be a bad result. If CT had been active in LOTR movies some
of the worst "innovations" might have been avoided. But my impression is
he hasn't ever been in favor of movie adaptations.

[davem]

It will be interesting to see how much the settlement came to - I'm assuming that Warner has had to pay big time....And of course, as the Tolkien Trust is a charityit will have to announce its income for this year in next years figures, which will be freely available from the Charity Commission website http://www.charity-commission.gov.uk...idiaryNumber=0

& the last accounts for year ending Apr 2008 - if anyone's interested, donations start on page 10 http://www.charity-commission.gov.uk...080405_e_c.pdf

[Mithalwen]

Well on past performance they will put the money to exemplary use.

[PrinceOfTheHalflings]

Originally Posted by davem

It will be interesting to see how much the settlement came to - I'm assuming that Warner has had to pay big time...

If it was for much less than $100 million I'd be very surprised.

[Mister Underhill]

The appearance of a spammer on the thread caused me to read a few of the more recent posts. I am not a lawyer either, but I'm curious -- wouldn't this idea of "creating a substantially different work" by making alterations be ineffective? I mean, if you change a work enough to create a substantially different work, won't the original work still enter the public domain according to schedule anyway?

As an extreme example, I assume something like Pride and Prejudice and Zombies is copyrighted, but of course the original Pride and Prejudice -- even those parts that are identical to the altered, copyrighted version -- is still in the public domain.

[davem]

Originally Posted by Mister Underhill

I am not a lawyer either, but I'm curious -- wouldn't this idea of "creating a substantially different work" by making alterations be ineffective? I mean, if you change a work enough to create a substantially different work, won't the original work still enter the public domain according to schedule anyway?

I'm not sure about the whole Ace Books thing & the exact reasoning behind the decision for the changes which resulted in the Second Edition, yet, for all the arguments about Tolkien 'nigggling' at his work & being unable to leave it alone, we do know that that edition - with its changes, additions & deletions, only exists because Tolkien wanted to get LotR copyrighted in the US (btw, anyone wanting a cheap First Edition text of LotR should look out for the Ace paperbacks, as they are generally a lot cheaper than the 'official' ones).

[PrinceOfTheHalflings]

Originally Posted by Mister Underhill

The appearance of a spammer on the thread caused me to read a few of the more recent posts. I am not a lawyer either, but I'm curious -- wouldn't this idea of "creating a substantially different work" by making alterations be ineffective? I mean, if you change a work enough to create a substantially different work, won't the original work still enter the public domain according to schedule anyway?

Yes, you are absolutely correct. To give an another example - in Europe musical recordings are only copyrighted for 50 years from their initial release (although there is legislation pending to change this to 70 years). So any song released before 1959 is now public domain in Europe. Obviously all the rock bands that recorded music in the 1960s are now worried that their copyright is shortly going to expire!

It has been suggested that The Beatles, for example, could remix their albums to establish a new version of each. However, this would not stop the original mixes of their albums from entering the public domain during the next decade.

To give another example ... if I release a newly edited version of Shakespeare's "Hamlet" with extensive annotations then that new edition is copyright, but the copyright only applies to my additions and not to Shakespeare's original text.

Once The Lord of the Rings enters the public domain the Tolkien Trust will no doubt create some super-duper "authorised edition" with loads of "new" and "exclusive" features that are still protected by copyright. However, anyone will be free to publish a bare-bones edition that just contains the original text.

[PrinceOfTheHalflings]

I've just had another thought - Tolkien's books will enter the public domain at different times in different territories. For example, George Orwell's books are public domain right now in Canada, but still under copyright in the US. That could cause major confusion for anyone planning to make a movie in a few years time.

[Mithalwen]

Originally Posted by PrinceOfTheHalflings

If it was for much less than $100 million I'd be very surprised.

http://economictimes.indiatimes.com/...ow/4990245.cms

Well as Dave said the Trust accounts will give a fair idea but if they asked originally for $150million then even allowing that an ooc settlement would not be the full amount ... then I would hope you were right. Of course they may have agreed to be paid in instalment.

Given that the trust aims to give continuing longterm support to its chosen charities I imagine that they will invest the bulk of the settlement in order to do this from income rather than distribute it as capital.

Even with current miniscule interest rates a lump sum of this size should generate enough to maintain the trust as a force for good for a long time even without getting crafty with extending copyright. A legacy that like the Road will go on and on... I may have to forgive PJ for what he did to the book....

[Mithalwen]

http://www.thelondondailynews.com/el...ko-p-3476.html

I read about this (can't find actual story) over the weekend. I think that the estimated figure was $50 million- obviously including usual revenues as well as the film settlement. Wonder if this means that they are paying in instalments...