Seriously, Who’s Watching the Watchmen Lawsuit?

Dear Fox,
Eat All the Dicks
– Daniel O’Brien

Like lots of other bloggers, I was shocked to come out of my post-Christmas turkey induced coma to the news, broken by Michael Sieply in the New York Times, that Twentieth Century Fox has succeeded in at least some of their lawsuit against Warner Brothers relating to “Watchmen” – a ruling which now puts the proposed March 7th release of the film in jeopardy.

Now at midnight all the agents and the superhuman crew come out and round up everyone that knows more than they do.
– Bob Dylan

Like lots of comic fans, my initial reaction was annoyance – I’m a tremendous fan of Alan Moore and Dave Gibbons original work, and have been looking forward to the film with equal parts anticipation and dread. My bio notes that I’ve been hired three times to write about comic books for very disparate magazines (all three of which stopped publishing before my first columns ever saw print). It’s a testament to the depth and breadth of “Watchmen” that I was able to reference it in all three of my initial columns despite the very different audiences and focus of each. It’s one of my “hook” books to introduce adult readers to comics when they ask me to “recommend something” (although I do occasionally suggest that on first reading one can skip the supplementary text-pieces, and “tales from the black freighter” sub-plot – both of which have caused friends of mine to “stall” and not finish the book).

My frustration quickly turned from Fox to the larger press given that since Justice Feess dropped his December 24th surprise order no one was actually reporting on what the case was about, except in vague banalities like “contract dispute”. For copyright and computer law I’ve been a little bit spoiled by resources like Groklaw – wherein within moments of legal documents being available they have been widely made available and dissected into plain English by eagle-eyed legal beagles. Eaglebegles. Leaglebles.

I can’t offer that, but since no one else seemed to be looking into this, I spent yesterday morning digging through the Byzantine labyrinth of PACER (the US courts electric document filing system) to bring (hopefully) a little meat to this discussion.

Firstly, and most importantly, here for your reading pleasure is the Honourable Garry Allen Feess December 24, “Order Re: Cross-Motions For Summary Judgement”. This is the (interim) summary judgement in full as filed on PACER.

Have no fear if you have an innate fear of all things legal-ish, judgements generally (and judge Feess here in particular) try to write in accessible “plain english” that absolutely anyone can read. Plus at six pages, it’s succinct.

Most importantly it lays out the case very clearly, and far from being legal bickering on some contractual fine-point (the legal professions bread and butter), I was actually astonished at how strong a case Fox has, and am somewhat confused as to what Warner Brothers was thinking in the first place.

The “two-minute” summary is pretty easy: In 1986 Fox purchased the option to “Watchmen” (presumably from DC Comics) and, in 1990, they exercised that option by paying out $320,000 – making them the only entity able to produce and distribute a “Watchmen” movie.

A year after they bought all the rights to the film, Fox gave them to a film producer named Lawerence Gordon (producer of “Die Hard”, “Hellboy”, and one of my personal favourites – the criminally underrated “Mystery Men”, amongst manty others). To be specific, Fox actually gave the rights to one of several companies controlled by Gordon at the time, with the caveat that if the film was ever produced, Fox would be the distributor.

In 1994 Gordon decided to withdraw from the companies in question – as part of his withdrawal agreement from these companies, he got to take the interest in “Watchmen” with him – and at that time signed an additional agreement with Fox that he could buy out their interest in “Watchmen” if he liked by paying Fox a buy-out fee.

At it’s core, that’s pretty much where the legal summary ends. Mr. Gordon proceeded to produce the film with Warner Brothers (despite the fact that Fox notified them very early on that they felt they had the legal right to distribute the film, and had – you know – Mr. Gordon’s signature on an agreement that pretty much said this was the case). Warner Brothers argument is that due to the terms of the agreement under which Gordon obtained the rights from his company – Fox’s interest ended at that time… which seems a pretty flimsy basis for a defence given the very clear “buy-out agreement” between Gordon and Fox (in fact judge Feess points out in his decision that Warner is effectively arguing that the court would have to “nullify (a) clear understanding reached between extremely sophisticated parties”.

Aside from the details of the case, there’s some interesting context in the order itself. There is a lot of confusion on-line because as late as December 17th Judge Feess was suggesting that this might need to go to trial. In his order he clarifies that, essentially, both Fox and Warner told him that they just wanted him to make a decision on this central copyright infringement issue which they didn’t feel would be clarified by any further legal proceedings (Warner also wanted him to adjudicate on the issue of a cap on the amount of compensatory damages – from which a skeptic might infer that they perhaps weren’t entirely confident in their ability to win this case going in).

Also particularly juicy is justice Feess fairly scathing footnote to page 4, in which he calls out Gordon (and his lawyers) for not testifying personally, asserting a fairly unique variant of lawyer/client privilege. Judge Feess points out that even if he chose to talk to the court now – the judge is not changing his ruling. Nikki Finke has written more about this legal wrist-slap.

So with all that out in the open, where do we go from here? It’s important to note that this actually isn’t the judge’s final ruling. That will likely be a lengthier document some weeks down the line, but justice Fees noted that time was of the essence (given that the film is supposed to come out in a shade over two months from now) and so he would give a “shorter ruling” in advance so it didn’t come as a surprise. Given this order there is no way Warner Brothers can release the film as it stands – they’ll need to resolve the issue with Fox (likely with a reeeeealllly big novelty cheque) before March 7th if they don’t want to delay the release. There are also a number of other contractual issues as part of this lawsuit to which this order doesn’t apply, but I get the impression that this is the major one to stop the release of the film, hence it’s priority in handling. I quite liked Judge Feess’s candour in suggesting in his conclusion that Fox and Warners, instead of preparing for a lengthy trial, could better spend their time just figuring out a solution.

According to the judge’s order there was a conference call between all the parties this morning – so we’ll have to wait and see what fallout (if any) there is from that call.

Update – The excellent FilmEsq Blog has a good summary of the status of the case at the moment they also report on some recent statements by both parties that would suggest a quick settlement is unlikely.

Personally, I’ve done a 180 on the whole issue, going from a vague notion that Fox was “legal gold-digging” to wondering what the heck Warner Brothers and their council were thinking not resolving this sooner. Especially given that there was a clear and easy path to proceed back at the very beginning of this process (paying Fox’s “buy out fee” before even starting production) I’m a little baffled how they’ve ended up in this situation having spent considerable time and effort producing and marketing a film they don’t have the rights to. Maybe there are no “grey zones” and with enough facts everything can be reduced to a moral black and white after all… hey, who does that remind me of?

NB: If I’ve given anyone a taste for reading interesting funnybook-related legal judgements, I highly recommend NEIL GAIMAN v. TODD MCFARLANE, which has lots of interesting stuff on verbal contracts, the state of the comic industry in the early 90s, and a highly entertaining overview of “Spawn” that I think the judge enjoyed writing.