WATCHING THE WATCHMEN LAWSUIT

Fox has won a round in the ongoing battle over the rights to graphic
novel WATCHMEN, which is being turned into a feature film by Warner
Bros., according to VARIETY. A judge has denied a motion filed by Warner
Bros. to dismiss the lawsuit filed by Fox in February over their right
to make the film.
Fox could end up as a profit participant in the film, costing WB
millions in box office cash. Fox's legal team says it is looking to
prevent the film from being released altogether.

WATCHMEN the film has been in development for 20 years, and finally
began filming under director Zack Snyder last September. WB was set to
release the film, starring Patrick Wilson and Jackie Earle Haley, on
March 6, 2009, the same weekend as 300 opened last year.
The basis of Fox's suit is the contention that it never gave up the
rights to WATCHMEN. According to federal Judge Gary Allen Feess, Fox
retained distribution rights to the graphic novel through a 1991 claim.
Also, Feess seems to have agreed with a 1994 turnaround deal with
producer Larry Gordon that Gordon acquired an option to acquire Fox's
remaining interest and never followed through, thereby leaving Fox with
its rights under the 1994 agreement.

"It is our company's policy not to comment on pending litigation and
thus will not comment on the specifics of this case," WB said in
statement. "That said, the court's ruling simply means that the parties
will engage in discovery and proceed with the litigation. The judge did
not opine at all on the merits other than to conclude that Fox satisfied
the pleading requirements. We respectfully disagree with Fox's position
and do not believe they have any rights in and to this project."

The judge wants the discovery process, normally allowed up to two years,
to be hastened as WATCHMEN is set to be released this spring.
"Warner Bros.' production and anticipated release of THE WATCHMEN motion
picture violates 20th Century Fox's long-standing motion picture rights
in THE WATCHMEN property," Fox said in a statement. The film's official
title is actually WATCHMEN, as well as the source material, a graphic
novel written by Alan Moore and illustrated by Dave Gibbons.

"We will be asking the court to enforce Fox's copyright interests in THE
WATCHMEN and enjoin the release of the Warner Bros. film and any related
WATCHMEN media that violate our copyright interests in that property,"
the statement concludes.

Fox would rather see the project killed altogether rather than collect a
percentage at the box office. "When you have copyright infringement,
there are some damages you never recover," a source close to the
litigation told VARIETY.

Fox has spent upwards of $1 million developing WATCHMEN, but had not
previously taken legal action against the project, which has been in
development at Paramount for several years.