“Who watches the Watchmen?” For over a year everybody from die hard fans to fellow filmmakers have had their eyes on Zack Snyder’s adaptation of the DC comic. Labeled as “the most celebrated graphic novel of all time,” it’s no surprise that Watchmen is one of the most anticipated films of 2009. What has come as a shock, is the behind the scenes drama that has escalated between studio titans Warner Brothers and 20th Century Fox. For the past year both companies have been submerged in a legal battle over the distribution rights for the film. If your like me, you have been following the drama, watching things go from bad, to worse, to down right nasty. In the past week, both sides have come forward in an attempt to share their side of the story. No one wants to be the bad guy in the case, but in my opinion they both have some explaining to do.

Ever since early last year 20th Century Fox has been trying to block the release of the Watchmen movie, stating that they have a claim on the films distribution. Fox acquired the rights to the film in the mid-eighties from producer Larry Gordon but according to the LAtimes, after sitting on the shelf for a few years the studio signed a turnaround deal that gave Gordon the option to shop the film around to other studios. This deal was valid under a few specific conditions that involved the transferring of “some” of the film’s rights from Fox over to Gordon.

In 1991, Fox entered into an agreement with Gordon, a former Fox studio chief, under which Fox transferred some of its “Watchmen” rights to Gordon. The studio believes the 1991 deal gave Fox distribution rights to the film and a share of “Watchmen” and any sequel’s profits if Gordon made the film elsewhere. Three years later, Fox entered into another agreement with Gordon, this time saying that Fox was putting the film in turnaround (meaning the studio would not be making it at the time and Gordon could try to sell the project to someone else), according to court documents and people close to the dispute. As Fox interprets that 1994 deal, Gordon wouldn’t fully control “Watchmen’s” production rights until he reimbursed Fox its development costs (with interest, now in excess of $1 million, Fox says), a payment Fox says Gordon never made.

During the December 24, 2008 court hearing between the two studios, U.S. District Court Judge Gary Feess agreed that 20th Century Fox does hold a legal interest in the Watchmen film. After this decision was announced, Fox continued to flex their muscle by reinforcing their desire to to delay the films release.

With frustrations reaching a boiling point, parties on both sides are starting lose composure. Their professional facade is starting to crack, and the internet is becoming an outlet for Watchmen insiders to speak their peace. At the height of the legal drama, Watchmen producer Lloyd Levin, wrote an open letter that was published via HitFlix, giving his perspective of the film’s current legal situation.

From my point of view, the flashpoint of this dispute, came in late spring of 2005. Both Fox and Warner Brothers were offered the chance to make Watchmen. The response we got from Fox was a flat “pass.” That’s it. An internal Fox email documents that executives there felt the script was one of the most unintelligible pieces of shit they had read in years. Conversely, Warner Brothers called us after having read the script and said they were interested in the movie – yes, they were unsure of the screenplay, and had many questions, but wanted to set a meeting to discuss the project, which they promptly did. Did anyone at Fox ask to meet on the movie? No. Did anyone at Fox express any interest in the movie? No. Express even the slightest interest in the movie? Or the graphic novel? No.

From there, the executives at Warner Brothers, who weren’t yet completely comfortable with the movie, made a deal to acquire the movie rights and we all started to creatively explore the possibility of making Watchmen.

When I read this letter from Levin, I was a bit confused, because according to him Warner Brothers did acquire the rights to the movie. Yet, if this was true Fox wouldn’t have legitimate grounds to win anything, especially the preliminary hearing they attended last month. This is an old fashioned case of ignoring the fine print.

Warner Brothers put their blood, sweat, tears and most importantly, their money into making the Watchmen. Their genius marketing has made the film an event for fans, and a worthy follow up to last year’s The Dark Knight. Granted, Fox’s timing is in bad taste but it’s not unfounded. After Lloyd’s letter hit the internet, a spokesperson from Fox sent out an official response to these accusations stating that Levin & co. “neglected basic facts and legal rulings.”

Fox notified Warner Bros. of our rights in this project months before production on the film began — they chose to ignore our rights on this occasion and several times after that and proceeded at their own risk. Only after having our rights in the film deliberately ignored by Warner Bros. did we take the action of filing litigation in order to have those rights recognized.

As you can see this has become a virtual he said, she said argument. Is it wrong that Warner Brothers did all the work to produce the Watchmen, only to have to share it with Fox? Of course it is, Fox’s timing is more than opportune, especially when Warner Brothers just produced the most successful comic book film of all time.

Yet, this case doesn’t come down to a simple who did what, why, and when. Both studios have been around almost as long as the film industry itself, these aren’t independent upstarts we’re talking about. Logically, Warner Brothers should have known better and they got tripped up by a loop hole.

According to reports from the major trade magazines, the two studios have been meeting to discuss a possible settlement, but nothing is written in stone. We don’t know how the chips will fall, but either way I hope the movie get’s to keep its March 6 release date. There is no reason to punish the fans, actors, and crew by shelving the movie until the red tape has been cleared. My advice for all involved, is learn from your mistakes and move on.