Lord of the Rings lawsuit settled; studio can proceed with The Hobbit

The heirs of J.R.R. Tolkien and the movie studio behind the blockbuster “The Lord of the Rings” trilogy have settled a lawsuit over the films’ profits, it was announced Tuesday.

The out-of-court resolution clears the way for a two-film prequel based on Tolkien’s novel “The Hobbit” and will benefit charities around the world, according to a joint press release announcing the settlement.

The lawsuit had sought to rescind New Line Cinema’s rights to make films based on the book.

Tolkien’s heirs sued New Line Cinema in February 2008, claiming the studio owed it millions in profits from the movies released between 2001 and 2003. The films earned an estimated $6 billion in sales of movie tickets, DVDs and merchandise.

No settlement paperwork has yet been filed with a Los Angeles court. The terms of the deal are being kept confidential.

“We deeply value the contributions of the Tolkien novels to the success of our films and are pleased to have put this litigation behind us,” said Alan Horn, president and chief operating officer of Warner Bros. Entertainment Inc.