Middle-Earth Enterprises, formerly known as Tolkien Enterprises is a company controlled by Saul Zaentz. It controls the worldwide film, stage, and merchandise rights to J. R. R. Tolkien's The Lord of the Rings and The Hobbit. Tolkien sold these rights to United Artists in 1968, who in turn sold them to Zaentz in 1976.
In 1978, Tolkien Enterprises produced the animated version of The Lord of the Rings directed by the controversial animator Ralph Bakshi, which covered approximately the first half of the Lord of the Rings. In 2001 - 2003 Peter Jackson filmed the whole Lord of the Rings trilogy under license from Tolkien Enterprises, which went on to win 17 Oscars and numerous other international and national awards.
In 1999, Tolkien Enterprises severed their licensing agreement with Iron Crown Enterprises for role-playing games set in Middle-earth after Iron Crown Enterprises ceased developing new products for this line. This contributed to Iron Crown Enterprises' filing for bankruptcy in 2001. Tolkien Enterprises then made a new licensing agreement with Decipher Inc. for their Lord of the Rings Roleplaying Game.
In 2002 Tolkien Enterprises took part in making the video game The Lord of the Rings: The Fellowship of the Ring, which was based on the book, not on the film. Then, in 2003, Tolkien Enterprises took part in the making of The Hobbit video game, which was for a younger age group.
Following this, in August 2004, Tolkien Enterprises sued New Line Cinema for over $20 million in unpaid royalties, based on the difference between gross and net profits for The Lord of the Rings: The Fellowship of the Ring, and the exact terms of the royalty arrangement between Tolkien Enterprises and New Line Cinema. An out-of-court settlement was reached in August 2005 however, details were not released.