If you don't defend your IP, you lose it.
At least that's how copyrights work in the U.S., I'm pretty sure.
I'm not saying things one way or the other: she may be a greedy whore, she may be a saint; who's to say? But you guys have to keep the law in mind, too (unless you do have it in mind, and I'm completely off base :P ).
I see that as the whole basis of what's wrong with U.S. copyright law. The author should be allowed to retain the IP throughout selective defense. However, I'm fairly certain British copyright law has clauses about selective defence, seeing as the U.S. version is (to my knowledge) the only legislation where an all-or-nothing approach has been taken.
And yeah, either way, a smaller token amount seems good enough. I could see this being a problem if say, Rowling wanted to open a theme park in India, but I doubt that's the case. And even if it is, this fixture looks to be temporary, so what's the big deal? I'm almost certain no one would have taken notice outside of a small community if no legal action had been brought against the display.