A Lesson of Transactions Costs

When they get high enough, people go to all sorts of lengths to avoid them — and we get to explore how to rearrange things to lower them, for everyone’s benfit: ‘The Rings’ Prompts a Long Legal Mire

This week heirs of J. R. R. Tolkien, author of the “Lord of the Rings” trilogy and “The Hobbit,” and a group of publishers joined the battle with a lawsuit demanding at least $150 million from New Line Cinema, the movie studio that hit the jackpot with three enormous hits based on the trilogy.

They are hardly the first: in fact, the trilogy may be turning into the first true cinematic “franchise” for local legal representatives. The lawsuits, to some extent, have fed one another, and are providing a feast for those who bill by the hour.

[…] The litigation history surrounding the movies is almost as complicated as the lore of Middle-earth. […]

[…] To some extent, the flood of suits is business as usual in Hollywood, where success has a thousand fathers, and they all want to be paid. Yet there is something extraordinary in the spectacle of litigants, one after another, filing claims for a bigger piece of the “Rings” trilogy.

See also Universal Royalty Suit