At that time, 'merchandising' from films or tv shows included things like lunch boxes, t-shirts, posters, jigsaw puzzles, and the like. I remember when I was in third grade at Fordyce I had a 'phaser' from Star Trek (circa 1967-68) that fired little whizzing disks, and a board game based on VOYAGE TO THE BOTTOM OF THE SEA (the tv show, not the movie) about the same time.
Nowadays, the things that might be covered by 'movie merchandising' have vastly expanded. For example, the Iron Crown MERP roleplaying game, the Middle-earth: The Wizards collectable card game, and the more recent LotR Online games were not licensed by the Tolkien Estate but Tolkien Enterprises, as movie merchandising, although the link between the MERP game and the 1978 Bakshi horror it was supposedly licensed from is thin indeed (esp. contrasted with the strong, clear links between the Peter Jackson film trilogy and the more recent computer games based upon them). It was also Tolkien Enterprises, not the Tolkien Estate, that came down on a little company named TSR, circa 1974, and forced them to purge names like "hobbit" and "nazgul" and "balrog" and "mithril" from their new little game called DUNGEONS AND DRAGONS, even though there was at that time no movie whose rights this usage could have infringed upon: it was pro-active enforcement of rights linked to movies that did not yet exist, or were even in the works.
Thus, the trend over the years has very much been to assume that the rights granted by the contract could be interpreted extremely broadly. And now comes some pushback: what if, instead of a 'loose contructionist' model, a 'strict constructionist' model were applied to the contract, by which it wd grant only very specific and limited rights? Nowdays contracts often explicitly include rights to mediums not yet in existence, but what if an old contract were taken in the context of the time? What if a 'movie merchandizing' clause did not grant rights to any new category of merchandizing that might come into existence at some point in the future, but were limited only to merchandizing as understood at the time? Courts have sometimes ruled one way, sometimes the other, when it came to disputes over new categories of rights.** The specific flash-point that seems to have set off this pushback is Tolkien Enterprise's granting Tolkien names and characters to gambling machines. Here's the story:
Be interesting to see how this one plays out, both from the point of view of a Tolkienist and as someone who's worked in the rpg industry where rights and licenses and such are an integral part of the whole edifice.
*thanks to Wendell W's post on the MythSoc list
**one famous case being when Wizards released a compilation of all the issues of DRAGON magazine in a cd set (for which there was precedent), only to have some contributors (mainly cartoonists) argue that this constituted a reprint (for which WotC wd need specific item-by-item, case-by-case permissions). That one turned out badly for all concerned: Wizards released the set, then had the ruling go against them, with the end result that the material disappeared down a black hole