Legal News

Fox and Warner Bros. Settle ?Watchmen? Spat

By Dan Slater

Last month, on Christmas Eve, U.S. District Judge Gary A. Feess handed 20th Century Fox a nice gift, preliminarily granting the studio’s claim of copyright ownership in “Watchmen,” a forthcoming tentpole from Warner Bros. (Pictured, right, is Silk Spectre II, played by Malin Akerman.)

Judge Feess promised a more detailed order, but advised the studios to focus on either reaching a settlement or appealing the decision. They opted for a settlement, reports the L.A. Times, paving the way for Warner Bros. to release “Watchmen” as planned on March 6.

Fox and Warner Bros., which will go before Judge Feess today to ask for the case to be dismissed, had been battling for nearly a year over which studio controlled distribution rights to “Watchmen.” Fox sued Warner Bros. in 2008, alleging that the studio and the movie’s producer, Larry Gordon, failed to obtain the rights from Fox, where the project had been in development.

Under the terms of an agreement hammered out over recent days, Warner Bros. agreed to pay Fox as much as 8.5% of the film’s gross receipts plus about $1.5 million to cover the movie’s development costs, a source told the LAT. The agreement extends to sequels and spinoffs, the person said.

Judge Feess’ Xmas Eve ruling in favor of Fox gave the studio important leverage, notes the LAT. Had Fox and Warner not settled, Fox could have pursued an order from Feess that would have blocked Warner from releasing the movie. Warner already has movie trailers playing in theaters and TV spots on the air promoting the upcoming release.

(Disclosure: Fox is a unit of News Corp., which also owns Dow Jones & Co., publisher of The Wall Street Journal.)

Full post as published by Law Blog - WSJ.com on January 16, 2009 (boomark / email).