JRR Tolkien’s family have settled an 80 million dollar (£62 million) lawsuit with Warner Bros over the rights of Lord Of The Rings and The Hobbit.

The British author’s daughter Priscilla Tolkien and the estate teamed up with publishers HarperCollins to sue over merchandising rights.

JRR Tolkien Warner Bros
JRR Tolkien died in 1973 (PA)

Warner said on Monday they have “amicably” resolved the legal battle that had lasted nearly five years.

Tolkien’s estate argued that when they sold the rights to the films in 1969 merchandising of goods such as figurines, stationary and clothing was allowed.

But they said the studio overstepped the mark by producing video games and apps based on the books.

To make matters worse, they said, Warner “outraged” Tolkien’s fans by using his characters in gambling games online and even planned to take them to casino slot machines.

They sued in California in November 2012 for damages exceeding 80 million dollars and asked for legal fees to be paid as well as the maximum rate of interest.

Warner counter-sued, claiming the estate had made an “about face” and had previously consented.

JRR Tolkien Warner
The Hobbit: An Unexpected Journey attending the UK premiere (Ian West/PA)

A Warner Bros spokesman said: “The parties are pleased that they have amicably resolved this matter and look forward to working together in the future.”

The spokesman did not comment on the outcome of the settlement made on Thursday.

Legal papers showed Warner dropped the counter-claim and no parties were entitled to recover fees or costs.

Tolkien, an Oxford University professor, died in 1973 at the age of 81.