Watchmen Legal Battle: Fox v. Warner Bros. explained

The NY Times (via ComicBookMovie.com) reports:

HOW could this happen? The question springs to mind as 20th Century Fox claims it has the rights to the graphic novel on which Warner Brothers is basing “Watchmen,” its giant superhero movie.

Peer deeper into the murk of Hollywood’s business practices, though, and the question becomes: How could it not?

The film industry was buzzing last week after a federal judge here allowed Fox to proceed with a lawsuit contending that Warner had filmed “Watchmen” without bothering to acquire rights that Fox says it has owned for 22 years. This eagerly anticipated movie is directed by Zack Snyder, of “300” fame, and is based on the illustrated series (republished as a graphic novel) by Alan Moore and David Gibbons.

Warner, of course, begs to differ with Fox. So the studios are squared off for battle. Fox wants an injunction blocking the movie’s planned release on March 6. Warner wants Fox to go away.

Studios have certainly fought like this in the past. Metro-Goldwyn-Mayer and Sony Pictures Entertainment, for instance, swapped lawsuits a decade ago over Sony’s plan to make a series of James Bond films to rival MGM’s. MGM won, more or less, after Sony settled and dropped its films. But Sony soon wound up distributing a Bond movie, the highly successful “Casino Royale,” as it became financially involved with a reorganized MGM.

That battle grew from a decades-old fight between the filmmaker Kevin McClory and the author Ian Fleming over the rights to “Thunderball” (Mr. McClory had contributed to the screenplay).

The Fox-Warner tiff turns on matters potentially more nettlesome to the industry at large. Central to Fox’s complaint is the mysterious matter of what is called turnaround.

On its face, turnaround is a contractual mechanism that allows a studio to release its interest in a dormant film project, while recovering costs, plus interest, from any rival that eventually adopts the project. But turnaround is a stacked deck.

The turnaround clauses in a typical contract are also insurance for studio executives who do not want to be humiliated by a competitor who makes a hit out of their castoffs.

That trick turns on a term of art: “changed elements.” A producer of a movie acquired in turnaround who comes up with a new director, or star, or story line, or even a reduction in budget, must give the original studio another shot at making the movie because of changed elements, even if a new backer has entered the picture.

Thus, “Michael Clayton” was put in turnaround by Castle Rock Entertainment (which, like Warner, belongs to Time Warner). When George Clooney became attached to star in it, however, Castle Rock stood on its right to be involved as a producer of what turned out to be an Oscar-nominated film.

Fox, in its complaint filed in February with the United States District Court for the Central District of California, contended, among other things, that Lawrence Gordon, a producer of “Watchmen,” was given a somewhat unusual perpetual turnaround right under an agreement reached in 1994. Such rights are conventionally given for a finite period, but Mr. Gordon, as a powerful producer who was once a Fox studio chief, may have had an edge.

According to the court filings, Fox had declared its willingness to part with the project under certain terms in 1991. In any case, Fox says, Mr. Gordon was supposed to resubmit “Watchmen” to Fox every time he came up with a changed element.

There certainly were changes. At one point, Terry Gilliam (“Brazil”) was supposed to direct it, at another, Darren Aronofsky (“The Fountain”), and at still another, Paul Greengrass (“The Bourne Ultimatum”). Writers have included Sam Hamm (“Batman”), David Hayter (“X-Men”) and Alex Tse (“Sucker Free City”), among others.

Paramount, still another party in the mix, was once close to making the film. But its new chairman, Brad Grey, backed away and created a turnaround of his own in 2005.

Tantalizingly, Fox’s complaint, which does not name Paramount, said that Warner settled a dispute with an unidentified “purported rights holder” by sharing part of its own claimed interest. Patricia S. Rockenwagner, a Paramount spokeswoman, says her studio has foreign distribution rights to the film.

Warner gave “Watchmen” the go-ahead when Zack Snyder, immediately after his surprise hit with “300,” took it under wing. Yet Mr. Gordon, by Fox’s account, never checked back with Fox about any of this.

Mr. Gordon did not respond to requests for comment. Warner, both in court and in a statement last week, said it had done everything legally necessary to make the film.

In the real world, of course, turnaround — along with much of Hollywood’s machinery for securing film rights — long operated with a certain degree of messy pragmatism. Elements might change. Producers would proceed on a wink and a nod. When things were stuck, a bit of horse-trading got them moving again.

But the stakes have become too high for that sort of informality. “It’s gotten a lot more difficult,” Larry Stein, a veteran Hollywood lawyer at Dreier Stein Kahan Browne Woods George, said of the entire business of rights protection.

Studios, Mr. Stein added, “are securing their self-interest in every way they can.” After all, who wants to slip up when the fifth sequel to “Batman” can take in half a billion dollars at the domestic box office?

WARNER has been stung lately in some very different situations involving rights. In March, a federal judge here ruled that the heirs of Jerome Siegel, a co-creator of Superman, the studio’s mainstay hero, were entitled to reclaim a share in the copyright of the character. Lawyers for the studio have not yet given up the fight, and proceedings are continuing over what that will mean in dollars and cents. The studio’s New Line Cinema unit is also embroiled in continuing litigation with the heirs of J. R. R. Tolkien over their claim to have been defrauded of profits due from the blockbuster “Lord of the Rings” series.

In the “Watchmen” case, it remains to be seen whether the presiding judge, Gary A. Feess, will grant an injunction blocking the movie’s release while sorting things out. But in 2005, Judge Feess issued an injunction blocking the planned release of Warner’s film “Dukes of Hazzard” in a rights dispute, leading to a settlement under which the studio paid $17.5 million to a producer who claimed infringement.

There will be motions and hearings aplenty, however, before it comes to that. And those who watch closely may see enough of Hollywood’s process to wonder how movies get made at all.

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Watchmen Legal Battle: Fox vs. Warner Bros. Part II

 Comics2Film reports:

On the heels of Nikki Finke’s scoop that the 20th Century Fox vs Warner BrosWatchmen‘ battle would continue, comes a report from Variety that reveals the situation for the film may be more dire than what we reported yesterday.

To recap: on Friday U.S. District Court Judge Gary Allen Feess found that Fox’s assertion (that it holds some claim on the film rights of the graphic novel) is valid and refused to throw the claim out of court. This paves the way for Fox to seek an injunction against Warner Bros preventing the release of the film, which is planned for March 2009.

We speculated that Fox was likely seeking a settlement and the ruling and subsequent court proceedings would give them leverage over Warner Bros, who is beyond the point of no return with the film.

However, Variety’s report says that Fox may not be willing to settle and may aggressively persue that injunction.

Fox issued a statement that reads:

Warner Bros.’ production and anticipated release of ‘The Watchmen’ motion picture violates 20th Century Fox’s long-standing motion picture rights in ‘The Watchmen’ [sic] property.

We will be asking the court to enforce Fox’s copyright interests in ‘The Watchmen’ [sic] and enjoin the release of the Warner Bros. film and any related ‘Watchmen’ media that violate our copyright interests in that property.

In addition, Variety also cites an unnamed source “close to the litigation” who claims that Fox, who invested a reported $1 million in the project, will not be settling the case.

“When you have copyright infringement, there are some damages you never recover,” said the source.

It’s hard to believe that the ‘Watchmen’ movie and its spin-off movies (the ‘Black Freighter’ animated film and the ‘Under The Hood’ faux documentary, not to mention the currently released “motion comic”) will be put on mothballs. Today that seems like a possible outcome.

See Variety’s article here.

Watchmen Legal Battle: Fox vs. Warner Bros.

The Hollywood Reporter reports:

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.

 

Thanks to ComicBookMovie.com for this article.

Archimedes, Nite Owl’s Airship !

Here’s a new photo of Nite Owl II‘s airship Archimedes, shown here under wraps in Nite Owl’s basement workshop.

Thanks to Ain’t It Cool News for the pic!

Four NEW Watchmen Images !!

Here’s four really cool new pictures from the upcoming film adaptation of Watchmen!

Thanks to Empire Magazine for these images.

My favorite Watchmen posters from Comic-Con

Thanks to Ain’t It Cool News and ComicBookMovie.com for these images:

Watchmen – scene by scene trailer analysis

Here’s a pretty good analysis of the Watchmen trailer by Rotten Tomato’s Greg Dean Schmitz.