In a stunning about-face Judge Gary A. Feess has ruled that 20th Century Fox “owns a copyright interest consisting of, at the very least, the right to distribute the Watchmen motion picture." Just a week earlier the same judge indicated that he couldn’t make a ruling and set a new trial date of January 20th for Fox’s lawsuit (see “Watchmen Still in Judicial Limbo”). In issuing his decision in favor of Fox the judge opined that “The parties may wish to turn their efforts from preparing for trial to negotiating a resolution of this dispute or positioning the case for review.”
A more detailed ruling in the case is coming soon, but Judge Feess’ decision in favor of Fox could really put a crimp in Warner Bros. plans to release the Watchmen movie on March 6th. Fox could of course accept a payment (or a fee plus a percentage of the film’s gross) and allow Warner Bros. to proceed with its planned March release, but it appears that, if the judge’s ruling stands, Fox could get an injunction preventing Warner Bros. from distributing the film, if Fox so desires. Warners could eschew a settlement and appeal, but that route would be costly and time-consuming.
In a previous case regarding the rights to the Dukes of Hazard movie, Judge Feess ruled against Warner Bros. and the studio ended up paying millions of dollars in a settlement in order to release the film. The judge’s ruling puts Warner Bros. in a very difficult position—if the studio decides to appeal the decision rather than to settle, it could be years before the film is finally released.
The dispute stems from the fact that Fox was the first studio to option Watchmen in the late 1980s. The project went from Fox to Universal to
Producer Larry Gordon, who has been with the project from the beginning, is at the center of the dispute. In a surprising development that has just come to light in Judge Feess’ latest ruling, it appears that Gordon has refused to testify concerning the key 1994 “turnaround” agreements citing attorney/client privilege, contending that he could not separate his own recollections from what he learned from his counsel, a use of attorney/client privilege that evidently upset Judge Feess considerably. In his opinion the judge noted that “The Court takes a dim view of this conduct and questions whether the assertion of privilege was proper. Moreover the assertion of privilege does have a consequence: having now reached a decision based on the record before it, the Court will not, during the remainder of this case, receive any evidence from Gordon that attempts to contradict any aspect of this Court’s ruling.”
If Gordon, who reportedly told Warner Bros. that he had cleared the rights with Fox, can't testify, it would appear to make an appeal more difficult and some sort of settlement more likely.
