Hollywood Reporter has the story:
Read the full lawsuit here.
In an $80 million lawsuit filed Monday in U.S. District Court in Los Angeles and obtained by The Hollywood Reporter, the Tolkien estate and its book publisher HarperCollins claim that Warner Bros., its New Line subsidiary and Rings/Hobbit rightsholder Saul Zaentz Co. have infringed the copyright in the famous books and breached a contract. The crux of the suit is the estate's contention that a decades-old rights agreement entitles the studio to create only "tangible" merchandise based on the books, not an "online slot machine" or other digital exploitations that the estate calls highly offensive.
The estate lists several categories of goods but is especially peeved about new gambling games developed with story elements from Lord of the Rings. "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."
Read the full lawsuit here.