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You are incorrect in some details. A criminal act occurs when you steal IP worth more than X amount or more than X copies of something. (I'm unsure on the exact numbers). Tolkien's IP goes WAY over those boundaries. For instance, were you to steal 10 chapters from Lord of the Rings, printed it up and started giving it away on street corners, you could be prosecuted under criminal law.
Furthermore, and I willingly admit I can't quote you a court case on this, I'm nearly certain that inactivity can no longer cause a copyright holder to lose the copyright. You're quoting an outdated case, even though it's from 1989. And further, the core of New Era vs. Henry Holt case you quote (and, in fact, the core defence) was that the defendant was publishing a 'scholarly' biography of L. Ron Hubbard, and most legitimate academic use falls under fair use.
--matt
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