According to a post on Slashdot from last night, this story means that,
Blizzard Entertainment is suing New Line for using the word Diablo as the title of a movie release. Blizzard wants to make a movie of their own with the same title and feel New Line is only using the word to cash in on the popularity of the Diablo gaming world. Since when did Blizzard own all rights to the word “diablo”? And what kind of precedent would this set if they were to win.
The first sentence is correct, but everything that comes afterward is nonsense. Blizzard isn’t claiming they own all instances of the word “diablo.” Rather, like any other company making a movie Blizzard applied for a trademark for a film titled “Diablo” back in 1996 which was approved in 2000.
This is a common practice in the movie industry and hardly anything for Slashdot to start creating hysteria over.