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‘Hobbit’ Lawsuit Headed to Arbitration

Warner Bros. wins a procedural victory in the ongoing dispute over The Hobbit franchise.

Upon the release of The Hobbit: The Desolation of Smaug, a legal battle broke out -- with Harvey and Bob Weinstein and Miramax on one hand and Warner Bros. and its New Line division on the other -- over tens of millions of dollars from the franchise.

Now, according to a report by The Hollywood Reporter, Warner Bros. has just won a procedural victory in the ongoing dispute by ensuring an arbitrator's role at least at the outset.

The Weinsteins and their Miramax claim they are entitled to a percentage of revenue from the second and third Hobbit films stemming from a 1998 agreement giving up film rights to the J.R.R. Tolkien fantasy novels.

That deal promised Miramax five percent of the gross receipts of the “first motion picture” based on the books. The Weinsteins point out that Tolkien wrote just one Hobbit book and that Warner Bros.' unilateral decision to split the book into three films shouldn't limit their compensation to just the 2012 film.

Warner Bros. is insistent that the Weinsteins only get money for a “first motion picture,” per the express language of the agreement, and say that Miramax had already been paid more than $90 million.