JRR Tolkien's heirs sue for share of the Ring movies' £3bn profits

THE estate of Lord of the Rings creator JRR Tolkien is suing the film studio that made the trilogy based on his books, saying the company has not paid it a penny from the estimated £3 billion the movies have grossed worldwide.

The lawsuit claims New Line Cinema was required to pay 7.5 per cent of gross receipts to Tolkien's estate and other plaintiffs, who say they received only an upfront payment of $62,500 (31,850) for the three films before production began.

The writer's estate, a British charity called the Tolkien Trust, and HarperCollins, the original publisher of Lord of the Rings, filed the lawsuit in Los Angeles Superior Court. If successful, it could block the long-awaited prequel to the films.

New Line, which is owned by Time Warner, declined to comment.

The films – The Lord of the Rings: The Fellowship of the Ring (2001), The Lord of the Rings: The Two Towers (2002) and The Lord of the Rings: The Return of the King (2003) – have reaped nearly $6 billion combined worldwide, according to the lawsuit. That estimate includes everything from box-office receipts to revenue from sales of DVDs and other products.

The Tolkien estate and the other plaintiffs are seeking more than 76 million in compensation, unspecified punitive damages and a court order giving the Tolkien estate the right to terminate any rights New Line may have to make films based on the author's other works, including The Hobbit. Such an order would scuttle plans by New Line to make a two-film prequel based on The Hobbit.

Peter Jackson, the director of the Rings trilogy, has already signed up to serve as executive producer on the project, which is tentatively due to begin production next year, with releases planned for 2010 and 2011.

"The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court," Steven Maier, a lawyer for the Tolkien estate, said.

"New Line has not paid the plaintiffs even one penny of its contractual share of gross receipts, despite the billions of dollars of gross revenue generated by these wildly successful motion pictures."

Mr Maier also claims the film studio has blocked the Tolkien estate and the other plaintiffs from auditing the receipts of the last two films.

The lawsuit says JRR Tolkien established a trust through which he signed a film deal in 1969 with United Artists.

After Tolkien's death in 1973, his heirs created the charity in the author's name.

Meanwhile, the original agreement terms were picked up by the Hollywood producer Saul Zaentz, who produced an animated film in 1978 based on the Rings books. Mr Zaentz licensed the rights to make live-action films to Miramax in 1997, but a subsequent agreement between Mr Zaentz and Miramax led to New Line taking on all the rights and obligations in the deal.

That included the obligation to pay the Tolkien estate 7.5 per cent of gross receipts for any films based on the author's books once the films made more than 2.6 times their final cost of production, according to the lawsuit.

Tolkien's heirs, some of whom are trustees of the charity, claim New Line used bogus accounting and allowed the destruction of records to cheat them out of a slice of the films' profits. Lawyers for the plaintiffs said they have spent the years since the films were released trying to negotiate a settlement with New Line.

Other disputes over the film's earnings have surfaced in recent years.

In 2004, Mr Zaentz sued New Line, claiming the studio had cheated him out of $20 million in royalties from the film trilogy, which he optioned to New Line for a percentage of the movies' profits.

He and the film studio reached an out-of-court settlement a year later.

Jackson's production company also tangled with New Line in 2005 over profits from the films. A lawsuit was settled last year.

A FANTASY TALE FOR THE CHILDREN

JRR Tolkien originally wrote the story that became The Lord of the Rings so he could read it to his children.

After the success of The Hobbit, a fantasy story published in 1937, his publishers wanted more stories of a similar nature.

He started The Lord of the Rings at the age of 45 and it took him 12 years to complete.

Although he finished it in 1949, it was not fully published until 1955.

Tolkien wrote several other children's tales, such as Roverandom.

He also worked on a book,today known as The Silmarillion , but died before he finished it. His son Christopher edited his father's work, filled in gaps, and published it in 1977.

The massive popularity of Peter Jackson's trilogy sparked a new interest in Tolkien's works and sales rocketed.