JRR Tolkien

The J.R.R. Tolkien estate and HarperCollins, current publishers of JRR Tolkiens works, have been refused the right to seek punitive damages in their lawsuit against New Line Cinema for failure to pay royalties for the film versions of The Lord of the Rings.

Tolkiens estate claimed that New Line Cinema breached the agreement and commited fraud by diverting money from the 6 billion the films have generated worldwide for false expenses, including advertising expenditure to AOL for advertising and also money to build production offices and facilities in New Zealand that were then used for other projects, so as to reduce net profits and pay out less in royalties.

Tolkiens estate and HarperCollins sought $150 million in damages, but the Los Angeles court decided that they had not presented enough evidence of intentional wrong-doing. The defendents are pursuing their lawsuit, based on the 1969 agreement made with United Artists governing the movie rights to both The Lord of the Rings and its prequel The Hobbit.

The lawsuit also seeks a court order to terminate New Lines rights to make the two upcoming films based on The Hobbit which is being directed by Guillermo del Toro. If an agreement of royalties cannot be reached, a trial is scheduled for October 2009. New Line was absorbed into Warner Brothers Entertainment in February of this year.