JRR Tolkien’s family has settled a £62 million lawsuit with Warner Bros over the rights of The Lord Of The Rings and The Hobbit.

The author, who died in 1973, was an Oxford don, and his daughter Priscilla Tolkien and the estate teamed up with publishers HarperCollins to sue over merchandising rights.

Warner Bros 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.

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.”

JRR Tolkien died aged 81 in 1973 and is buried in Wolvercote Cemetery.

With CS Lewis he was a key figure in The Inklings writing group.