The Beowulf Norns were created by Drauga Drottin, who used Bondi Norn sprites as a template to create the Beowulf Norns. Creature Labs, usually being very generous in allowing community members to take original C3 Creatures sprites and altering them to make a new norn breed, wasn't pleased by the fact that a freshly released breed that was meant to be paid for had been changed into a free norn breed.
The Beowulf Norns, said to be genetically similar to the Hardman Norns, were tougher than normal norns, didn't starve easily and fought back grendels, as in the myth. In this sense, they were similar to the Osiris Norns, also known for their grendel hunting ability.
Possibly in response to Creatures Labs' concerns (this however, is just conjecture - he has also said that he felt that the Beowulfs were a 'rush job'), Drauga took the breed offline immediately and began creating a new and improved version. At some point after this Hellfrozeover hosted the Beowulf Norns on her freewebs site, but they were later taken down again. On the 9th of January 2006 Knux Econa made them available, but now here site is down and you can get them here at NornenMeisters site. Treesprite created an egg agent for her own use in November 2006, and though she was reluctant to upload the egg file, since Creatures Labs did not approve of the breed, she did upload a fix for a sprite issue present in the Beowulf norn release. One of the arm sprites for the adult female was missing, and the old female sprites were being used instead. The fix can be obtained here.
After the "Beowulf case", Creature Labs (at that time represented by Frimlin in the Docking Station Forum) gave a new "rule", stating that they would only tolerate new breeds made out of all the original Creatures games breeds (i.e. the breeds that came with the C1, C2 or C3 games), as well as the freely-available breeds like the ChiChi Norns (i.e. that came with the free DS game). They also made clear that they would prefer to see completely new created sprites, such as the Junglenorns. This meant that third-party breeds could not be made from Creatures Mall breeds.