For those unfamiliar with the case, Fox brought a copyright lawsuit against Warner Bros last February, asserting that in a series of legal agreements in 1991 and 1994, they retained distribution rights to a film based on the Watchmen graphic novel.
On Christmas Eve, Judge Gary Feess ruled that Fox owned a distribution interest in the film and a trial was scheduled for January 20th.
Warner Bros. gets the right to open its superhero pic on March 6 as planned, and Fox’s logo will not be on the film, sources said.
Fox, on the other hand, will emerge with an upfront cash payment that sources pegged between $5 million and $10 million, covering reimbursement of $1.4 million the studio invested in development fees, and also millions of dollars in legal fees incurred during the case.
More importantly, Fox will get a gross participation in “Watchmen” that scales between 5% and 8.5%, depending on the film’s worldwide revenues. Fox also participates as a gross player in any sequels and spinoffs, sources said.
Both studios issued this joint statement:
“Warner Bros. and Twentieth Century Fox have resolved their dispute regarding the rights to the upcoming motion picture “Watchmen” in a confidential settlement.
Warner Bros. acknowledges that Fox acted in good faith in bringing its claims, which were asserted prior to the start of principal photography.
Fox acknowledges that Warner Brothers acted in good faith in defending against those claims.
Warner Bros. and Fox, like all “Watchmen” fans, look forward with great anticipation to this film’s March 6 release in theatres.”
Nikki Finke provides more background details:
This is a case where producer Larry Gordon’s hot property changed hands again and again since the late 1980s from Fox, to Universal, to Paramount, until finally to Warner Bros and Legendary Pictures which together went forward with the $130 million film despite knowing that Fox had claims which led to the lawsuit.
The next legal step might have been an injunction against Watchmen‘s March 6th release. Initially, Warner Bros said it would fight Feess’ intention to side with Fox and appeal.
But then, according to my sources, Warner Bros boss Barry Meyer stepped up and stopped that, and his studio finally started talking settlement with Fox last week.
So now, Warner Bros can release Watchmen domestically as planned, and Paramount (which also had to sign off on the settlement) play it internationally, and Fox reap the rewards, and fans of the comic book series/graphic novel can rejoice — or find something else about the movie to bitch about…
Although some tried to paint Fox as the bad guy who didn’t care about the material, the fact of the matter was that they did have a legal claim.
The real question is: how did Warner Bros manage to greenlight a production like this without realising they would be open to a massive lawsuit?
The court fight over “The Watchmen” is costing Warner Bros. and 20th Century Fox hundreds of thousands of dollars in legal fees, but the biggest bill of all could fall to the film’s producer, Larry Gordon, his lawyers and their insurers, who could be on the hook for substantially more money.
Court documents in the nearly yearlong dispute over the superhero movie’s distribution rights show that Warner Bros., which is poised to lose valuable rights to “Watchmen” after a judge’s favorable ruling for Fox, is pursuing Gordon “for all damages Warner Bros. suffers as a result of Fox’s claims.”
Although the main thing is that the film will be released, there is perhaps more on this case to be unearthed.