Paramount settles lawsuit with family of 'Godfather' author

Film canisters of the 1990 film ''Mario Puzo's The Godfather: Part III'' directed by Francis Ford Coppola are stored in the film archive vault which is three-stories high at The Academy of Motion Picture Arts & Sciences Pickford Center for Motion Picture Study in Hollywood September 10, 2012.

NEW YORK (Reuters) - The studio that made "The Godfather" movies has settled a lawsuit with the estate of author Mario Puzo, who created the Mafia family saga.

Paramount Pictures Corp sued in February in an attempt to block a new book in the "Godfather" series, which it said was being published without its permission and in violation of copyright agreements.

Notice of the settlement was filed in the U.S. District Court in New York on Thursday, but terms were not disclosed as the "parties have agreed that the terms of the settlement are confidential," said Richard Kendall, a lawyer for Paramount, a unit of Viacom Inc.

"We're very pleased with the settlement," said Bertram Fields, a lawyer for the Puzo estate.

Puzo, who died in 1999, was the author of the 1969 bestseller "The Godfather" and other novels on the same theme.

Paramount sued Puzo's estate in February, saying it had approved sequels without the movie studio's permission and in violation of its copyrights.

The family had received Paramount's permission for the publication of only one sequel, "The Godfather Returns," by Mark Winegardner, in 2004.

The Puzo family moved ahead with a second sequel, "The Godfather's Revenge," by Winegardner in 2006, without Paramount's permission, the lawsuit said.

A third book, a prequel called "The Family Corleone" by Ed Falco, was released by Grand Central Publishing in May. An interim settlement agreement provided that funds earned from the book would go into escrow, according to a September court decision.

In the lawsuit, Paramount also claimed its agreements with Puzo automatically gave it motion picture rights to "The Family Corleone" and any other sequels.

The estate filed a counterclaim in March seeking $10 million and accusing the studio of breaching a 1969 agreement with Puzo. It also asked the court to cancel Paramount's rights to the original "The Godfather" book.

In September, U.S. District Judge Alison Nathan in Manhattan denied a motion by Paramount to dismiss the estate's counterclaim, but dismissed the attempt to cancel the book rights.

The case is Paramount Pictures Corporation v. Anthony Puzo, U.S. District Court, Southern District of New York, No. 12-1268.

(Reporting by Nate Raymond; Editing by Vicki Allen)