Judge Won’t Dismiss Fox’s Watchmen Lawsuit

Earlier this year, 20th Century Fox filed a copy infringement and breach of contract lawsuit against Warner Bros over the big screen rights of the upcoming comic book adaptation Watchmen. Fox alleged that it had the “exclusive copyright and contract rights” to “produce and develop the picture and to distribute the work throughout the world.” When the story was first reported, many wrote it off as baseless. Even I assumed that it would be thrown out of court or quickly settled for a small amount of cash. WRONG.

Not only did the judge deny a motion by Warner Bros to dismiss the lawsuit, but according to Nikki Finke, he appeared to conclude that Fox actually retains the rights under a 1994 agreement with producer Larry Gordon. Of course, his opinion could change over the course of litigation, but this doesn’t look good for Warner Bros.

According to the suit, Fox acquired all motion picture rights to Watchmen through a series of contracts with the author, and subsequent screenplays by Charles McKeown and Sam Hamm. This has been certified by the U.S. Copyright Office. In 1994, Fox and producer Larry Gordon entered into an agreement that would require a buy-out payment if a Watchmen movie was ever produced, in addition for profit participation of 2.5 percent of 100 percent of net profits on any motion pictures that result (this includes sequels and spin-offs such as The Black Freighter). According to the lawsuit , neither Gordon nor Warner Bros has paid Fox the buy-out amount. Warner Bros insists that they have the sole rights to the project.

So what does this mean for the future of Zack Snyder’s Watchmen? I’m not a lawyer, so I really have no idea. The court is still considering Fox’s motion for an injunction to prevent the film from being distributed to theaters in March 2009. Who knows what will happen at the end of the day. Could Fox walk off with Zack Snyder’s film? I’m guessing the more likely scenario involved Warner Bros ponying up tens of millions of dollars, and possibly some back end points.