The lawsuit, filed Monday in U.S. District Court in Los Angeles, comes a week before the premiere of the "The Hobbit: An Unexpected Journey" in Wellington. The first film in the trilogy hits theaters worldwide next month.
The estate of Tolkien is upset at what it calls "morally questionable" digital marketing including a Lord of the Rings online slot machine, according to a copy of the lawsuit obtained by The Hollywood Reporter. The Tolkien estate is seeking $80 million from Warner Bros., its New Line subsidiary and rights holder Saul Zaentz Co.
Warner Bros. declined to comment on the claims.
Tolkien's family contends a merchandizing agreement extends only to tangible products such as figurines and clothing and not to electronic rights.
"Not only does the production of gambling games patently exceed the scope of defendants' rights, but this infringing conduct has outraged Tolkien's devoted fan base, causing irreparable harm to Tolkien's legacy and reputation and the valuable goodwill generated by his works," the family claims in the lawsuit.
The family says lengthy discussions with the producers over the disagreement proved fruitless and that it fears the scope of online merchandizing will only increase with the release of the 'Hobbit' movies.
Tolkien's heirs settled a lawsuit over the "Lord of the Rings" movies for an undisclosed amount in 2009, allowing production to proceed on "The Hobbit."
That lawsuit against New Line Cinema claimed Tolkien's trust received only an upfront payment of $62,500 for the three movies before production began but was due 7.5 percent of the gross receipts. The "Rings" films earned an estimated $6 billion from movie tickets, DVDs and merchandise.