Film Rights to First & Second Age

[William Cloud Hicklin]

They do not own the film rights to the published book THE SILMARALLION edited by CT after his fathers death....

You understate the case. They do not own rights to any of the manuscript materials from which CT edited the published Silmarillion, nor any of JRRT's other writings, published or unpublished. These materials were off-limits to UA in 1968 and continued to be so after 1977.

...the publishing and copyrighting of SIL causes many legal questions to arise

You may be under the misapprehension that copyright comes into being when a work is published. It does not. It comes into being at the moment of the work's creation.

...since much of what is in there was first published and included in LOTR and to a lesser extent in HOBBIT. If it was me, and I owned those film rights to that material, I would be very concerned that my rights have been severely diminished by CT causing to be published SIL.

There you're simply wrong. This notion of somehow 'diminishing rights' is nonsense. The film rights incorporate the right to make films of the contents of the Lord of the Rings. Had The Silmarillion never been published, then, arguendo, New Line could make movies based on the Appendices, alone, without reference to the (unpublished) Silmarillion. Post-77, arguendo, New Line could make movies based on the Appendices, alone, without reference to the (published) Silmarillion. Nothing has changed and their rights have not diminished one iota.

Also, please get this straight: the fact that Tolkien died before the Silmarillion was published is entirely immaterial. His heirs have just as much right to it as he did himself, and you can't get anywhere by claiming that CT and his father are different persons.

Film rights are derivative. They exist only in conjunction with the existence of a specific written work, and have no bearing of any sort whatsoever on future related written works by the author. As stated, your argument would lead logically to the conclusion that Saul Zaentz held veto power over The Silmarillion's publication! Zaentz bought rights to make use of the sketch history of the Elder Days. He did not buy all rights to the First Age.