The Times Online said Thursday the lawsuit filed in London claims Rowling lifted concepts and themes, particularly the notion of a wizardry competition, from Jacobs' 1987 novel "The Adventures of Willy the Wizard: No. 1 Livid Land" and used them in her 2000 novel "Harry Potter and the Goblet of Fire."
While Rowling's books and the films based on them have become blockbusters, only about 5,000 copies of Jacobs' book have been sold. Once a millionaire and lawyer, Jacobs died in poverty in 1997 after losing his fortune in the stock market, the newspaper's Web site said.
"I estimate it's a billion-dollar case," agent Max Markson -- who is representing Paul Allen, the Australian-based trustee of Jacobs' estate -- told The Times. "When you think of all the money that's involved, I would say $1 billion is a conservative estimate."
Rowling said in a statement she is "saddened that yet another claim has been made that I have taken material from another source to write Harry."
"The fact is, I had never heard of the author or the book before the first accusation by those connected to the author's estate in 2004; I have certainly never read the book," Rowling said. "The claims that are made are not only unfounded but absurd and I am disappointed that I, and my U.K. publisher Bloomsbury, are put in a position to have to defend ourselves. We will be applying to the Court immediately for a ruling that the claim is without merit and should therefore be dismissed without delay."