The Alan Dean Foster/Disney royalties dispute is far from the only case involving an author and franchise IP. The Saori Kuma Dragon Quest lawsuits and criminal action (!) in Japan are another important ongoing story. japaninsider.com/square-enix-su… animenewsnetwork.com/news/2019-12-1…
Alas, I haven't yet located original filings from Japan, but reports say that the dispute turns on a Dragon Quest film's use of a name derived from a character in a novel based on a video game. Might sound niche, but think of all the new characters in extended universes today!
The lawsuits by the book author exemplify why contracts often make sweeping claims for franchise IP owner's rights in any new characters + use in other media - you want to minimize risk of lawsuits down the line.
The extortion claim seems a bit strong - I'd have to read the original - but there's another line of argument by author that resonates with what Jerry Siegel tried to do in 1947 re Superman - alleging unfair competition.
And then there's the consumer protection claim, based on the law linked here. Extending law typically used for product marketing claims to arguably derivative character representations is creative, which in law can be good or fatal. jftc.go.jp/eacpf/01/Japan…
Unfair competition and consumer protection laws can give legal heft to claims based more on ethical principles than contractual language. Not slam dunks for creators by any means, but sometimes they work.
Another useful legal doctrine: implied-in-fact contract. Paradigmatic example: Hayden Christensen's successful argument that being allowed to pitch a project created a contract requiring payment if material used. hollywoodreporter.com/thr-esq/hayden… 
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