Warner, Fox reach "Watchmen" settlement

LOS ANGELES (Reuters) - Warner Bros and News Corp's Twentieth Century Fox reached a settlement on Thursday in a copyright infringement dispute over Warner's "Watchmen," paving the way for the March 6 opening of the highly anticipated superhero movie.

The settlement marks the resolution of a closely watched battle over a film expected by many analysts to yield box office gold, judging by the success of superhero films from "Iron Man" to "The Dark Knight."

Fox will get cash upfront under the terms of the settlement, two sources familiar with the details told Reuters. It was likely to also get a share of the film's box office proceeds, according to one of the sources and trade media such as The Hollywood Reporter.

Both studios declined to divulge specifics of the agreement in a joint statement late on Thursday.

Warner Bros, a unit of Time Warner Inc, produced the film based on a 1980s comic book series by Alan Moore and Dave Gibbons about superheroes operating under the specter of nuclear annihilation.

But Fox sued Warner Bros last year to stop its release. Fox, which acquired the rights to the "Watchmen" story in 1986, has claimed it has a continuing stake in the $120 million film helmed by "300" director Zack Snyder.

Fox and Warner Bros began negotiating last week after District Judge Gary Feess ruled that Fox owned "at the very least, a distribution right" in the film.

"Warner Bros and Twentieth Century Fox have resolved their dispute regarding the rights to the upcoming motion picture 'Watchmen' in a confidential settlement," the studios said in a joint statement.

"Warner Bros acknowledges that Fox acted in good faith in bringing its claims, which were asserted prior to the start of principal photography," they said.

Fox also acknowledged that Warner acted in good faith in defending against those claims.

Feess, presiding over the copyright dispute, delayed a decision last Friday on whether or not to move up a January 20 hearing on the dispute, because of the settlement talks.

Warner last week had tried to push that hearing up to January 12, saying the movie release was less than eight weeks away and the studio has tens of millions of dollars in marketing expenses on the line.

(Editing by Edwin Chan and Lincoln Feast)