Well one of them, I generally prefer the Shooting Star - about 200 yards further down the hill these days (as it has a better pool table). Over twenty years I have been drinking at the Hobbit. Last night a group of my friends all gathered there for a drink in the mistaken belief they could do something about this.
I don't think anybody is going to argue the film is not infringing copyright, even in the early 90s there were posters of illustrations from the book on the walls. They introduced a range of cocktails based on characters in the books (Gimli, Legolas and so on). When the films were introduced they brought in pictures from the films and hung them on the walls. They make "The Hobbit" T-Shirts. They have a life size statue of Aragorn from the movies in there. So discussions on the "hobbit" being an English word and prior art are irrelevent - they have posters and paintings from the film and book in there.
The point is that they have been called The Hobbit for a very long time and this lawsuit has popped up only because of the new film coming out. And SZC has probably been trawling the net looking for targets, I think that after the first trilogy films came and went and there was no mention of it there was an assumption things would remain the same for ever - I do remember a conversation at the time about copyright and the name of the pub. Among my friends there is a huge amount of anger about this because The Hobbit has been a bit of an institution in the alternative/student scene in Southampton as long as anybody can remember.
Having said that - nobody believes that anything they can do will change this and there are probably already re-branding plans on the horizon. The best possible outcome now is that they use the massive publicity to their advantage and choose a similar style of name - I have heard "The Camelot" mentioned as a possible option (and I don't think anybody can claim copyright over the Arthurian legends). Stella - the landlady - is not an idiot, I'm sure she's looking at all options. But from a legal case it's pretty clear where the law stands and there is no fighting that.