Watchmen in a Legal Battle

This from The Hollywood Reporter...

Warner Bros. is scheduled to release Zack Snyder's big-screen adaptation of the Alan Moore/Dave Gibbons comics series on March 6, but a federal judge in Los Angeles complicated that plan Wednesday when he refused to dismiss a lawsuit filed by 20th Century Fox against Warners over rights to the property.

Judge Gary Allen Fees ruled that Fox has established enough evidence to support its claims that it holds the distribution rights to the film version of the 1980s graphic novel about damaged superheroes.

Asserting what it calls its "long-standing motion picture rights" to "Watchmen," Fox said Monday that it will ask the court to "enjoin the release of the Warner Brothers film and any related 'Watchmen' media that violate our copyright interests in that property."

Warners has high hopes for "Watchmen," a potential franchise film that has a reported $120 million budget. The studio does not want to mess with success -- it released Snyder's previous big-screen effort, "300," in March 2006, and that action movie went on to gross more than $450 million worldwide.

Warners counters that Fox has no rights to the project.

"The court's ruling simply means that the parties will engage in discovery and proceed with the litigation," it said. "The judge did not opine at all on the merits, other than to conclude that Fox satisfied the pleading requirements."

Fox has sued Warners for copyright infringement and interference with its contract rights under a 1991 agreement between Fox and Largo Entertainment producer Larry Gordon.

Under that deal, Fox "quit claimed" its rights in "Watchmen" to Largo, with the understanding that if the production company proceeded with a big-screen version of the comic, then the movie would be distributed by Fox.

In 1994, Gordon negotiated with Fox "a turnaround notice" that established a buyout formula for the studio if he elected to acquire Fox's rights. But according to Fox, Gordon failed to follow the 1994 agreement.

In 2006, Warners negotiated a quit-claim contract with Gordon, under which it claims to have acquired the rights to "Watchmen."

Fox contends that it has retained its rights to the project because Gordon failed to buy out the studio's rights. It further claims that Warners turned a blind eye to Fox's rights. Warners, however, says under the 1994 agreement, Fox gave away all of its rights, including those to distribute.

Judge Fees disagreed, finding that Warners' motion to dismiss ignored several facts, including that the turnaround notice separately dealt with "Watchmen" and that there is nothing in the court record that shows Gordon has an interest in the project.