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Old 02-09-2013, 07:53 PM   #1
Zigûr
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Zaentz countersues the Estate

Hello everyone,
I imagine some of you heard late last year that the Estate was involved in legal action against Warner Bros. and Saul Zaentz Co. regarding the production of The Lord of the Rings-themed digital products, with the particular sore point apparently being gambling machines. Well apparently Zaentz et al have decided to respond in kind, issuing a counterclaim of their own:
http://www.wired.com/underwire/2013/...slot-machines/
http://www.icv2.com/articles/news/24963.html
Now normally I'd consider this to be part of the regular back-and-forth that might happen in these kinds of situations. What's particularly egregious about it, however, is this assertion from Zaentz Co. (quoted from the ICv2 article):
Quote:
"Zaentz admits that The Lord of the Rings and The Hobbit (and associated and proprietary characters, elements and markes) are among the most famous and valuable marks in the world," the response said, "and that an excellent reputation and highly valuable goodwill has been developed... Zaentz denies that this is the result of Plaintiffs’ efforts; rather, the fame and good will developed in these marks, products, goods, and services is largely the result of the dedicated efforts of Zaentz and its licensees (including Warner Bros.) over the past four decades."
Now while this is a truism when it comes to merchandise and what not which must have its origin in these corporate entities it almost seems as if they're claiming that they are responsible for the success of The Hobbit and The Lord of the Rings in general: "associated and proprietary characters, elements and marks". As far as I'm aware such a claim is not so much disputable as demonstrably wrong; Professor Tolkien's work was a massive success before these rights ever came into play, which has certainly not been happening in any noticeable way for as long as forty years - perhaps more like twelve when the films were getting going. I don't see Zaentz doing much for the "marks" between the time of their acquisition in 1976 and the release of New Line's adaptation of The Fellowship of the Ring in 2001 apart from the animated adaptations and some role-playing material which surely does not account for the majority of the "fame and good will developed in these marks" between those years.
Never have I seen the horrible corporate notion of "We made Tolkien better and are owed for it" made more apparent. I am reminded somehow of a similar claim which was also of dubious validity:
"I am the Elder King: Melkor, first and mightiest of all the Valar, who was before the world, and made it. The shadow of my purpose lies upon Arda, and all that is in it bends slowly and surely to my will."
So my question is this (for those who might be knowledgeable in such lore): is a claim of "four decades" remotely justifiable?
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Old 02-09-2013, 08:02 PM   #2
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Hmmm interesting thought... I think it could be argued that the maintained interest is due to the efforts of the movie industry Indeed most of these machines depict the actors of the motion pictures and not fan art lifted from the book...
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Old 02-09-2013, 08:49 PM   #3
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Hmmm interesting thought... I think it could be argued that the maintained interest is due to the efforts of the movie industry Indeed most of these machines depict the actors of the motion pictures and not fan art lifted from the book...
But "over the past four decades"? Undoubtedly the Lord of the Rings films created fresh interest in Tollkien- but they weren't made forty years ago, were they?
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Old 02-09-2013, 08:53 PM   #4
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Zaentz produced the baski films in 78 I think that's where they get the forty years
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Old 02-09-2013, 09:19 PM   #5
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Zaentz produced the baski films in 78 I think that's where they get the forty years
Seriously, Morsul- Baski's Lord of the Rings was responsible for the success of the novel? C'mon!
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Old 02-09-2013, 09:29 PM   #6
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This is after all Saul Zaentz we're talking about- underhanded and sleazy even by Hollywood's non-standards.
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Old 02-09-2013, 10:15 PM   #7
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Seriously, Morsul- Baski's Lord of the Rings was responsible for the success of the novel? C'mon!
I said no such thing, I said that's where the four decades comment was established.
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Old 02-09-2013, 10:31 PM   #8
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I said no such thing, I said that's where the four decades comment was established.
Yes, but- well, see my original comment. They're claiming it's "largely"" due to their efforts "over four decades". As the books were certainly famous and popular before the Jackson films, it follows that they must be talking about earlier adaptations or what-have-you (and associated marketing).
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Old 02-09-2013, 10:43 PM   #9
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Yes, but- well, see my original comment. They're claiming that the fame and success of the Lord of the Rings and The Hobbit are "largely" due to their efforts "over four decades". As these were certainly famous and popular books before the Jackson films, it follows that they must be attributing their success to earlier adaptations or what-have-you.
They are they're claiming the popularity was maintained through films ec starting with the Bashki films in 78. I didn't say they were right, or that I even agree. I'm just saying That's the case they're trying to build.

Frankly I think they'll do pretty well considering the dominance over culture Television and film have had over the past 50-60 years. I don't think it's too hard a sell to say the films are more popular than the book. Like I said I don't agree, but they only need to get 12 couch potatoes on a jury to agree...
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Old 02-09-2013, 10:51 PM   #10
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They are they're claiming the popularity was maintained through films ec starting with the Bashki films in 78. I didn't say they were right, or that I even agree. I'm just saying That's the case they're trying to build.

Frankly I think they'll do pretty well considering the dominance over culture Television and film have had over the past 50-60 years. I don't think it's too hard a sell to say the films are more popular than the book. Like I said I don't agree, but they only need to get 12 couch potatoes on a jury to agree...
And I'm saying I think it's a pretty hard case to build since as far as I know none of the previous adaptions had any great success. And generally a main reason for a novel to be considered worth adapting is that it is already popular. Hollywood isn't likely to show much interest in the film rights to a book no-one's ever heard of.
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Old 02-09-2013, 11:06 PM   #11
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I wish I could say I agreed with you.... But people don't buy toys for books...

I'm reminded of that scene in Spaceballs,
http://www.youtube.com/watch?v=oNZove4OTtI
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Old 02-09-2013, 11:07 PM   #12
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I don't think that's the point.
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Old 02-09-2013, 11:16 PM   #13
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What I'm saying is, it certainly seems that Zaentz Co did little that would have contributed to the "fame and goodwill" of the Lord of the Rings and Hobbit "brand" prior to the Jackson films- yes, even as a purely commercial property.
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Old 02-09-2013, 11:45 PM   #14
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What I'm saying is, it certainly seems that Zaentz Co did little that would have contributed to the "fame and goodwill" of the Lord of the Rings and Hobbit "brand" prior to the Jackson films- yes, even as a purely commercial property.
This is my view as well. Surely the Bakshi cartoon and some licensed games did not account for the majority of "Tolkien awareness" during the period prior to the release of the New Line films. Indeed it would seem to me that beyond the existing enduring popularity of The Hobbit and The Lord of the Rings it would have been Christopher Tolkien's publication of material such as The Silmarillion, Unfinished Tales and The History of Middle-earth series which would have contributed the most to continued awareness prior to the New Line films, which would put things more in the domain of the Estate over the majority of those "four decades".
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Old 02-10-2013, 05:49 AM   #15
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And again- as for the general contention that film/TV fandom comes first- well, there is a reason Hollywood does so darned much of this book-to-film stuff, Morsul. As I said, a book without a significant existing audience and/or reputation rarely makes it to the screen in the first place.
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Old 02-10-2013, 07:28 AM   #16
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If I needed another factor to make me shy away from the movies, and the cynically crass marketing gimmickry that follows them like flies to a dunghill, I now have it.
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Old 02-10-2013, 08:28 AM   #17
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I think we're losing sight that the lawsuit isn't about the claim "we're the reason the Lord of the Rings is a popular brand over the past 4 decades."

Zaent Co.'s countersuit is they are not in breach of contract by putting LOTR and Hobbit characters on gambling machines, and the Estate already agreed to allow this type of merchandising. The "over 4 decades" seems like one of those ridiculous, blustery statements you get from spokespersons and lawyers.
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Old 02-10-2013, 08:38 AM   #18
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The "over 4 decades" seems like one of those ridiculous, blustery statements you get from spokespersons and lawyers.
Not that they care in the slightest what I think, but language like that isn't exactly going to win me over to their side.
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Old 02-10-2013, 08:46 AM   #19
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And again- as for the general contention that film/TV fandom comes first- well, there is a reason Hollywood does so darned much of this book-to-film stuff, Morsul. As I said, a book without a significant existing audience and/or reputation rarely makes it to the screen in the first place.
Are we playing WW right now? My head hurts the same way....

I'm not disagreeing with you, I'm explaining the defense Zainst is putting together. I again never said they were correct in their assertions.
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Old 02-10-2013, 12:17 PM   #20
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They are they're claiming the popularity was maintained through films ec starting with the Bashki films in 78. I didn't say they were right, or that I even agree. I'm just saying That's the case they're trying to build.
...
I don't think their case should be taken seriously either. I remember seeing the Bashki film and it certainly did not inspire me to buy the book.

The only thing they might actually be responsible for is unintelligible anime

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Old 02-10-2013, 01:19 PM   #21
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What I'm saying is, it certainly seems that Zaentz Co did little that would have contributed to the "fame and goodwill" of the Lord of the Rings and Hobbit "brand" prior to the Jackson films
Or after, either: all Zaentz did was accept a check from the Weinstein brothers for the privilege of making the movies (which the Ws subsequently sold along to New Line in exchange for a cut, ultimately making themselves a pile). ZaentzCo contributed pretty much zip-point-zilch, not even Miramax' sunk pre-production costs.

The notion that the Estate and the Tolkien name somehow benefited from "good will" generated by bobbleheads and Burger King cups is beyond risible.
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Old 02-10-2013, 04:58 PM   #22
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Seriously? Can't they live a few months without suing each other?
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Old 02-10-2013, 05:10 PM   #23
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Seriously? Can't they live a few months without suing each other?
Let us not forget we're talking about the man who sued John Fogerty of Creedence Clearwater Revival for plagiarizing himself (and lost). Nice fellow.
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Old 02-10-2013, 05:20 PM   #24
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Are we playing WW right now? My head hurts the same way....

I'm not disagreeing with you, I'm explaining the defense Zainst is putting together. I again never said they were correct in their assertions.
Well, hey, I never said you did either. But you were saying it was a case that would be hard to beat- so I'm explaining why I don't think that's so. OK?
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Old 02-10-2013, 05:44 PM   #25
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Well, hey, I never said you did either. But you were saying it was a case that would be hard to beat- so I'm explaining why I don't think that's so. OK?
Ah I see where the disagreement is now. I apologize.

The reason I think it'll be hard to beat isn't because its a good defense or even remotely true, however we live in a time where books tend to be pushed aside for cinema and television I sadly think it isn't a far stretch to convince 12 couch potatoes to side with the film company.
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Old 02-10-2013, 11:36 PM   #26
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Hard to beat?

Since Zaentz has now put "the fame and good will developed in these marks, products, goods, and services" in factual contention, it hangs a curveball out over the plate for the TE's lawyers to bring on a whole parade of tacky, vulgar, tasteless crap ZaentzCo has willingly licensed over the years (and contrast it with the licensing proposals Christopher has rejected for being tacky, vulgar and tasteless.)
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Old 02-11-2013, 05:18 AM   #27
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I wish I could say I agreed with you.... But people don't buy toys for books...

I'm reminded of that scene in Spaceballs,
http://www.youtube.com/watch?v=oNZove4OTtI
Yet they do form literary societies to perpetuate the popularity of books. And many of the societies do have online shops and events where members may buy paraphernalia associated with their author and even engage in a bit of masquerade.

There are Bronte and Austen dolls, based on the books and not the movies. And to name just some of the societies--the Tolkien Society (tee shirts and mugs if you please), Bronte Society (mugs, calendars, cards, ties--yes, that actually are printed with "BS" on them), Austen Society (mugs, jewellery, calendars, cards, thimbles, chocolates), Browning Society, Baker Street Irregulars (all kinds of Sherlockiana), The Dickens Fellowship (what hath Tiny Tim wrought for our Christmases!), H G Wells Society, Lewis Carroll Society of North America, The Ghost Story Society, Robert Louis Stevenson Club (pubs, bars, games (board and video)* and even a Mr. Hyde doll). etc. etc. etc.

Some of these groups produce just journals; others hold annual events with speakers, performances musical and dramatical, walks and talks, costume events. They may not engage with the likes of Burger King to produce stuff, and they may not number in the millions, but most are devoted to their authors and they do represent a kind of literary fandom.

EDIT: *To be correct, the RLS Club does not sell these items but rather lists them under the category of "Unclassified Artefacts" in "Derivative Works on RLS"
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Old 02-11-2013, 05:56 AM   #28
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Originally Posted by Morsul the Dark View Post
Ah I see where the disagreement is now. I apologize.

The reason I think it'll be hard to beat isn't because its a good defense or even remotely true, however we live in a time where books tend to be pushed aside for cinema and television I sadly think it isn't a far stretch to convince 12 couch potatoes to side with the film company.
But... Morsul, they're not just going to poll a bunch of people on what they like best, books or films, then award the thing accordingly. I'm sorry if that comes across as sarcastic, but, well I don't know what to say– honestly, it is really is sounding like that's how you think it works.

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Yet they do form literary societies to perpetuate the popularity of books. And many of the societies do have online shops and events where members may buy paraphernalia associated with their author and even engage in a bit of masquerade.
Plus , there's plenty of what I would frankly term junk fiction that has a huge readership. Regrettably so, perhaps– but I think it can be pretty easily proven that many, many millions of people do read books. Often pretty bad books, in my opinion, but that's not the point.
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Old 02-11-2013, 03:08 PM   #29
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But... Morsul, they're not just going to poll a bunch of people on what they like best, books or films, then award the thing accordingly. I'm sorry if that comes across as sarcastic, but, well I don't know what to say– honestly, it is really is sounding like that's how you think it works.


Plus , there's plenty of what I would frankly term junk fiction that has a huge readership. Regrettably so, perhaps– but I think it can be pretty easily proven that many, many millions of people do read books. Often pretty bad books, in my opinion, but that's not the point.
What I'm saying is it comes down to the jury. If they get a very book friendly crowd the estate will do better if they get a bunch of tv watchers who only read texcts then Zainst has the advantage. Juries are people and people are usually swayed by their preferences. Juries are sort of like polling people, especially in a case of pretty subjective stuff. Are the movies famous because of the books or vice versa of course at the start the movies were made because of the books but after it's a bit more grey....
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Old 02-12-2013, 09:47 AM   #30
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Do cases like this ever reach the jury stage? Aren't they most often negotiated before trial begins?

That's certainly what happened when the Estate sued an author in the US for using Tolkien as an historical character in his novel. It's jockeying for position rather than raising a legitimate trial.
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Old 02-12-2013, 11:51 AM   #31
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Hard to beat?

Since Zaentz has now put "the fame and good will developed in these marks, products, goods, and services" in factual contention, it hangs a curveball out over the plate for the TE's lawyers to bring on a whole parade of tacky, vulgar, tasteless crap ZaentzCo has willingly licensed over the years (and contrast it with the licensing proposals Christopher has rejected for being tacky, vulgar and tasteless.)
*fingers his Lurtz figurine*

Why, William, whatever are you talking about?

*takes a sip from his Burger King Gandalf glass*

Are you implying that Zaentz-approved merchandise is tacky?

*pulls at the snug neck of his Gollum t-shirt, newly removed from packaging*

Well, I'd like to debate this more fully, but I have very little time...

*looks irritably at his Map-of-Middle-earth wrist watch*

...you see, I am just finishing up lunch...

*picks the last of his sandwich off his Legolas-embossed dinner plate*

...and I must return to work.

*pulls his Lord of the Rings key chain out of his pocket*

I will continue this discussion...

*Glares at his "The Two Towers: Extended Edition" calendar*

...Thursday next.
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Old 02-12-2013, 06:41 PM   #32
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I will continue this discussion...

*Glares at his "The Two Towers: Extended Edition" calendar*

...Thursday next.
Funny, I could almost swear that should be "Thursday Next", since we do seem to have a parallel universe where certain Tolkien goods are dodgy.
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Old 02-12-2013, 07:28 PM   #33
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What I'm saying is it comes down to the jury. If they get a very book friendly crowd the estate will do better if they get a bunch of tv watchers who only read texcts then Zainst has the advantage.
Two points, Morsul. Firstly, as Beth points out, these kind of things mostly don't get that far. Secondly, well, you seem to have a very odd idea of how a trial by jury works, anyway. I mean, you seem to think that what happens in court is basically irrelevant, and all that matters is what side the jurors "liked" best at the outset.

(And even on those terms, it's not as if Zaentz actually made the films...)
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Old 02-12-2013, 09:22 PM   #34
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Two points, Morsul. Firstly, as Beth points out, these kind of things mostly don't get that far. Secondly, well, you seem to have a very odd idea of how a trial by jury works, anyway. I mean, you seem to think that what happens in court is basically irrelevant, and all that matters is what side the jurors "liked" best at the outset.

(And even on those terms, it's not as if Zaentz actually made the films...)
Have you seen the court system? It's ALL about emotion. What happens in the court has to be outstanding to reverse someone's immediate choice I'd bet about 75-80% of jurors know within the first 5 minutes how they'll vote.

That may not be how the system is Supposed to work but as with anything on paper its perfect then once people arew involved it comes apart.

I'd like to point out I don't have much faith in juries...
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Old 02-12-2013, 09:33 PM   #35
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Two points, Morsul. Firstly, as Beth points out, these kind of things mostly don't get that far. Secondly, well, you seem to have a very odd idea of how a trial by jury works, anyway. I mean, you seem to think that what happens in court is basically irrelevant, and all that matters is what side the jurors "liked" best at the outset.

(And even on those terms, it's not as if Zaentz actually made the films...)
It would still seem fairly difficult to argue the Estate's case.

The gambling machines could go either way. The Tolkien Estate is trying to draw the line that gambling machines should not be allowed because it's merchandise that damages Tolkien and thus violates contractual agreements. Zaentz seems to believe since the copyright doesn't specifically exclude gambling machines and therefor it's fair game to continue slapping Tolkien characters and the LOTR brand on anything and everything.

I wish it was as simple as stopping the trash and junk the Zaentz co. licenses and pushes out to sell, but unfortunately passion and justice tends to give way to procedure and legal jargon. Both sides surely have a team of expensive and talented lawyers at their disposal.

I would guess the major decision is going to be over the gambling machines. But who can tell how that will turn out when the Estate wants to block the 'brand' from going onto the machines, and Zaentz is saying "well contractually it doesn't exclude gambling machines, therefor we should just be allowed to sell it." If there was already a separate agreement over permissable video games in '96, then I don't see what the TE could do about that part of the lawsuit.
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Old 02-18-2013, 04:03 PM   #36
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Hi all, this is my first post here. This particular topic interests me.

There's another layer to this lawsuit that I think you should all be aware of.

There's this total conversion mod for Skyrim that remakes Middle Earth in a map nine times the size of Skyrim's map. It's a really ambitious non-profit fan project.
Magic will be largely restricted to be more lore friendly. Spears will be implemented to the arsenal of weapons. There will be enhanced mounted combat.

http://www.moddb.com/mods/merp-middl...pons1#imagebox

Merp will also have its own original music and voice too. Here's a track.
http://www.moddb.com/mods/merp-middl...und-3#imagebox

There will be three "modes" to play. A Ringbearer quest-line, where you play as Frodo and go through his journey. There will be a dynamic timeline where events in the world are triggered by the dates they occur in the books. Best hurry to Mt. Doom before the Battle at the Black Gate is over.
There's also a White Council "mode", where you run errands and such for the White Council and a free roam "mode" similar to Skyrim. Each mode will have a ton of quests to complete. It would difficult to complete them in the Ringbearer mode and White Council mode because you'd have other duties to attend to and little time.

There's also supposed to be a realism mode, where the player has to worry about food and water. Viewing the map is restricted and combat is much more unforgiving in this mode.


In July Warner Brothers sent the project a cease and desist letter.
The modding team tried negotiating with them, even offering to severely limit the mod. WB didn't care. They wanted Merp gone, claiming that Merp would cannibalize the market. A multibillion dollar company feeling threatened by a non-profit fan mod.

The mod team got a lawyer and started a petition to revoke the cease and desist. The petition currently has over 28,000 signers. Maybe not much for WB, but nonetheless the team persevered.

In late November, The Tolkien Estate sued Zaentz and the their sub licensee Warner Brothers. In addition to the slot machines, Warner Brothers never had the legal rights to "non-tangible digital media". Entities such as Merp were beyond their jurisdiction, rendering their Cease and Desist void. The Tolkien Estate had inadvertently saved Merp.

Now however, Zaentz is counter suing the Estate, threatening to throw Merp back under the rule of Warner Brothers and undo the Estate's actions. This conflict between these two juggernauts does, in a way, decide the fate of fan projects like Merp.
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Old 02-18-2013, 07:24 PM   #37
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In late November, The Tolkien Estate sued Zaentz and the their sub licensee Warner Brothers. In addition to the slot machines, Warner Brothers never had the legal rights to "non-tangible digital media". Entities such as Merp were beyond their jurisdiction, rendering their Cease and Desist void. The Tolkien Estate had inadvertently saved Merp.

Now however, Zaentz is counter suing the Estate, threatening to throw Merp back under the rule of Warner Brothers and undo the Estate's actions. This conflict between these two juggernauts does, in a way, decide the fate of fan projects like Merp.
I have heard about this, although I didn't realise that the Estate's suit possibly put the project in the clear. It did seem at the time that WB was concerned that a fan-made project would threaten their own products; I've only played the Battle for Middle-earth games (surprisingly fun) and the Return of the King tie-in button-masher (stress relief if nothing else) but those are from before WB had the license. I'm led to believe that the more recent video games have not done particularly well so I can see why they might be concerned, but that's still a rather petty reason to issue a cease and desist, as well as showing a lack of confidence in their own products. In addition it seems like the fan project is a long way from completion, and it would be a shame if this counter-claim would put something with such effort devoted to it in jeopardy again.
That being said, and judging from the images I've seen, doesn't the mod largely use designs from the films? Their summary says:
"We use the films for inspiration, but base our visual design mainly on the descriptions in the books and the works of Ted Nasmith and John Howe."
but judging by the Rohan buildings, Treebeard etc it's still largely reminiscent of the films. I can see why it might be treading on a few toes in that regard.
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Old 02-18-2013, 11:25 PM   #38
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That being said, and judging from the images I've seen, doesn't the mod largely use designs from the films? Their summary says:
"We use the films for inspiration, but base our visual design mainly on the descriptions in the books and the works of Ted Nasmith and John Howe."
but judging by the Rohan buildings, Treebeard etc it's still largely reminiscent of the films. I can see why it might be treading on a few toes in that regard.
I really don't think so. Warner Brothers wouldn't even allow a private release for just the developers.
http://www.pcgamer.com/2012/09/06/mi...se-and-desist/

I think WB felt threatened by the project and took legal action against it using whatever reasons they could conjure up no matter how flimsy. A private release would have allayed their complaint of Merp's effect on the market. Warner Brothers didn't care.
In any case, the movies only covered a limited portion of Middle Earth; Merp would be showing all of it. Many locations would be designed by the team. Based on Tolkien, of course, but the films couldn't really be a source of inspiration for Fornost, or Dol Amroth or a variety of other places.
There might be some similarities between Merp and the films in the design of the "iconic" locations, but didn't Alan Lee work on the trilogy too?
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Old 02-19-2013, 12:45 AM   #39
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In any case, the movies only covered a limited portion of Middle Earth; Merp would be showing all of it. Many locations would be designed by the team. Based on Tolkien, of course, but the films couldn't really be a source of inspiration for Fornost, or Dol Amroth or a variety of other places.
There might be some similarities between Merp and the films in the design of the "iconic" locations, but didn't Alan Lee work on the trilogy too?
Quite so. I was merely trying to suggest some rationale for WB's attitude, but it does seem to derive more from sheer bloody-mindedness than any kind of genuine intellectual property issue. If they have so little confidence in their own ability to produce and market successful Tolkien-themed video games that they feel threatened by a fan mod for Skyrim I'm not really sure how they can think that putting a stop to its development is going to somehow improve their own success. Are they threatened by a non-profit mod because they fear that more people will buy Skyrim (rather than their own RPGs) as a result or some equally absurd concern? I notice however than in addition to having the license to produce film-related material WB also owns Turbine, Inc. which makes the specifically book-related The Lord of the Rings Online. Nonetheless, I would be curious as to whether there was any precedent or evidence for mods causing the kind of market "confusion" among consumers about which WB claim to be concerned. Where is the cease-and-desist against, say, The Third Age: Total War?
Frankly I despair of this 'Melkorism' among corporations, destroying things simply because they themselves did not create them and can't profit from them: "all gold (in Middle-earth) seems to have had a specially 'evil' trend"... (Morgoth's Ring)
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Old 02-19-2013, 07:46 PM   #40
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I notice however than in addition to having the license to produce film-related material WB also owns Turbine, Inc. which makes the specifically book-related The Lord of the Rings Online. Nonetheless, I would be curious as to whether there was any precedent or evidence for mods causing the kind of market "confusion" among consumers about which WB claim to be concerned. Where is the cease-and-desist against, say, The Third Age: Total War?
Frankly I despair of this 'Melkorism' among corporations, destroying things simply because they themselves did not create them and can't profit from them: "all gold (in Middle-earth) seems to have had a specially 'evil' trend"... (Morgoth's Ring)
It's probably not easy to speculate about all the variables that could effect the market. But considering the fact that Merp is a mod for an existing game, it isn't too much of a leap to assume that it wouldn't affect a large portion of people, at least not at first. Take the player-base for Skyrim, divide away the console users who can't play mods and all those who don't use mods anyways. The result can't be that much could it? If Merp were completed, I think word of mouth would make it well known, but that's years away at least. Who knows how many people would be willing to go out and buy a strong PC just to play Merp? The process of acquiring a mod tells me no one would confuse it for a game you'd have to purchase in a store. Your right about the "Melkorism" amongst these guys. It just becomes ever more transparent.
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