Warners, Fox settle flap, clear way for "Watchmen"

LOS ANGELES (Hollywood Reporter) - Geeks can rejoice. Warner Bros. and 20th Century Fox have resolved their dispute over the big-screen comic-book adaptation "Watchmen," with the Hollywood studios scheduled to present the settlement to Judge Gary Feess on Friday morning and request that the case be dismissed.

Terms of the agreement will not be disclosed, but it is said to involve a sizable cash payment to Fox and a percentage of the film's box office, which Warners plans to release March 6. Fox will not be a co-distributor on the film, nor will it own a piece of the "Watchmen" property going forward. The studios are set to release a joint statement announcing the agreement Friday.

A Warners spokesperson would not comment on the settlement. A Fox spokesman said no final deal had been reached.

Fox sued Warners in February, claiming copyright infringement based on agreements the studio had with producer Larry Gordon. Feess ruled on December 24 that Gordon did not secure the proper rights to "Watchmen" from Fox before shopping the project to other studios and eventually setting it up with Warners. Feess' decision prompted settlement talks to heat up because Warners faced the prospect of an injunction stopping its release of the $130 million film.

Gordon is not a party to the case, but Warners is said to be pursuing the producer and his attorneys to reimburse it for the costs of the settlement. During the litigation, Gordon's then-attorney admitted that he negotiated Gordon's 1994 separation from Fox without knowing about a pre-existing 1991 agreement on which Fox has based its lawsuit.

The rare showdown between studios became particularly nasty in recent weeks, with Gordon and the film's other producer, Lloyd Levin, lashing out at Fox for making a claim on the film. Fox repeatedly has stated that it asserted its "Watchmen" rights before Warners began production on the film and that it sued only when its assertions were ignored.

With the settlement giving Fox a piece of "Watchmen's" revenue, the studio now has a rooting interest in the film's success.

Reuters/Hollywood Reporter