Out-Law / Your Daily Need-To-Know

Pub urged to accept licensing deal over use of 'The Hobbit' name

Out-Law News | 19 Mar 2012 | 3:04 pm | 4 min. read

A UK pub threatened with legal action for allegedly infringing trade marks associated with the works of author JRR Tolkein should pay a licence fee in order to continue using its current name, an expert has said.    

Landlady Stella Mary Roberts has been threatened with legal action by Hollywood producers that claim her pub's name, 'The Hobbit', and other aspects of her business infringes its rights. The Hobbit pub in the Southampton area has been operating there for more than 20 years and has garden artwork, loyalty cards and special cocktails themed around characters created by Tolkein.

Saul Zaentz Company (SZC) claims ownership of trade mark rights over 'The Hobbit' as well as other rights relating to the works of author JRR Tolkein. The company is seeking to avoid taking court action against Roberts by offering her a chance to licence the name of the pub for $100 a year, according to a statement on the pub's website.

Trade mark law specialist Catrin Turner of Pinsent Masons LLP, the law firm behind Out-Law.com, encouraged Roberts to pay SZC the fee.

"The pub should take the licensing offer because there is no doubt that their use of 'The Hobbit' references the Tolkein creation," Turner said.

"It is to be expected that the use of a Hobbit theme for a pub would attract a price tag in the form of royalties that have to be paid. It may be that the pub has been offered an attractive deal, possibly even royalty free. Rejecting such a deal could mean that the pub faces legal claims for damages for use of the trade marks over the past 20 years and could also be ordered to re-decorate," she said.

In a statement on the pub's website Roberts said that 48,000 supporters were backing a campaign to allow her to continue using 'The Hobbit' name. Actors Stephen Fry and Sir Ian McKellen, who are cast to perform in the forthcoming 'The Hobbit' film, have also accused SZC of "bullying".

Roberts said that a licensing deal had been offered but that the detail was still to be discussed at a meeting with her lawyers scheduled for Wednesday.

"[SZC] have asked that we arrange to operate by way of License and that they would grant this License for a nominal fee of $100 per annum," she said. "It does not, however, tell us what this License would entitle us to".

SZC said it has "exclusive worldwide rights to motion picture, merchandising, stage and other rights in certain literary works of JRR Tolkein including The Lord of the Rings and The Hobbit," according to a report by the BBC. The company has asked the pub to remove all references to Tolkein characters, the report said.

Paul Zaentz, SZC producer, defended the company's action in seeking to protect its IP rights.

"Regardless of the size of the company, if we didn't go after these infringements, then other people would say 'if they can use them without authorisation, why can't we?'," he said, according to the BBC's report.

"When it's an established business, we like to get the company to acknowledge they are using our trademarks, stop selling infringing articles and then we will grant them a licence for a nominal fee - approximately $100 a year. We asked to them to contact us and amicably resolve this and are open to any suggestions they have. I'd be glad to raise a pint with them the next time I'm over," Zaentz said.

Roberts said that she had never intended to commercially exploit Tolkein's works and that her campaign to save The Hobbit name was being backed by the pub's landlords.

"It was never our intention to steal or profit from work written or created by someone else and we do not feel we have," Roberts said.

"We are not making or selling books or films nor are we selling pictures from either Tolkein's works or the Lord of the Rings trilogy. We have simply named our drinks after much loved heroes and villains and used three images from the films on our advertising. Everything we have done here especially the amazing artwork in the garden was inspired by our love of Tolkein's work and all things Middle Earth," she said.

"In hindsight maybe using a picture of Elijah Wood on our loyalty cards and using the same font as in the movie titles was not the best idea but it was done in good faith and we did it not to profit from it, but to keep in line with all things Tolkein," she said. "When the Hobbit was originally re named, over 20 years ago, no one ever mentioned Trade Mark or Copy Rights.  Nor were they mentioned when the Hobbit Cocktails were brought in around ten years ago. It is only now, when the Hobbit film is coming close to its December release date that the Saul Zaentz Company have taken notice of us".

"If we fight some or all of this it will cost us tens of thousands. To re brand the pub will cost us thousands. We are, however, being fully supported by Punch Taverns our Landlords, who are willing to try and reach an agreement with the Saul Zaentz Company so that we may keep the name and theme of the pub," Roberts said.

Under the EU's Trade Mark Directive and Community Trade Mark Regulations, trade mark owners can prevent competitors from "using in the course of trade any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered" without their consent.

The Directive also permits EU member states to draw up national laws giving extra protection to trade mark owners who possess a reputation in that country if others' use of similar or identical signs for similar or identical purposes "without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark".

In the UK, trade mark protection can be obtained by registering signs with the Trade Marks Registry at the UK's Intellectual Property Office. Under the Trade Marks Act "any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings" can be registered subject to certain conditions. The Act states that marks cannot be registered if they are "devoid of any distinctive character" or if an application is made in "bad faith".

Mark owners may also obtain 'goodwill' rights to unregistered marks giving them legal protection under the laws of 'passing off'. If mark owners can prove that their use of a trade mark has established 'goodwill' in the business associated with that trade mark protection to that mark may apply. Goodwill is essentially a reputation in the mark. If another trader 'passes off' their services as being those of mark owners and appear to claim that their services are theirs or that they are in some way connected or have been endorsed, then mark owners can take action.