One of the reasons the Watchmen legal case can be difficult to understand is because of the complex chain of ownership in the film rights. At the risk of over-simplification, the current suit is essentially about who has superior rights: Fox or Warner Brothers? There are, however, others who have a stake in the Watchmen movie. Specially, Paramount, who is not a party to the suit, has international distribution rights. This raises a red flag. If Fox did not convey rights to Paramount, where did their rights come from?

Warner Brothers’ memorandum in support of their fourth Motion in Limine explains how a convoluted series of deals led to Paramount’s involvement in the Watchmen movie. A link to the full document is featured at the bottom of this post but the following summary gets to the heart of the matter.

After his agreement with Fox, Lawrence Gordon entered Watchmen turnaround agreements with three different companies: Universal, Paramount and Warner Brothers. Universal’s efforts included hiring David Hayter to write a screenplay. Universal dropped the project. Paramount picked up the project and optioned the screenplay rights from Universal. When Warner Brothers began its own Watchmen project, the company’s intent was to acquire rights in Hayter’s screenplay in exchange for reimbursement of Paramount’s development costs and bringing on the company as a co-financier.

There were a few problems with the deal between Warner Brothers and Paramount. Paramount allegedly failed to exercise its option on Hayter’s screenplay, which prevent them from transferring proper title to Warner Brothers. Additionally, Universal still claimed development rights under its turnaround agreement. Universal, Paramount and Warner Brothers all settled their disputes. Presumably, Paramount came on as co-financier and gained international distribution rights in their settlement with Warner Brothers. One has to wonder what Paramount actually owns at this stage.

1. Warner Brothers Memorandum in Support of Motion in Limine No. 4