Nikki Finke is reporting at Deadline Hollywood that a federal judge has denied Warner Bros.' motion to dismiss 20th Century Fox's attempt to preclude the production of Zack Snyder's "Watchmen" film, a development that could potentially have immense ramifications for WB in 2009.In February of this year, Fox filed a lawsuit to prevent the WB project from going forward, claiming Fox had the exclusive rights to develop, produce and distribute a film based on the hugely popular DC Comics graphic novel by Alan Moore and Dave Gibbons. Warner Bros. motioned for a dismissal of the lawsuit, and U.S. District Court Judge Gary Allen Feess denied WB's motion last Friday. No decision has yet been made regarding Fox's desire for an injunction of the entire WB project.

A Fox source told Finke, ""While the Judge's opinion is preliminary and his views could change in the course of the litigation, his current take on the facts is consistent with our position."This news comes after the recent announcement that the Warner Bros. film "Harry Potter and the Half-Blood Prince" would be rescheduled from this November to instead premiere in 2009. Should 20th Century Fox manage to secure any profit from Warner's "Watchmen," the studio will need to count on the revenue generated by the Harry Potter film to maximize the year's earnings. Of Fox's claim to the rights to "Watchmen," Finke's source said, "In essence, the Judge appears to conclude that Fox retained distribution rights in Watchmen through the 1991 Largo quit claim, and he concludes that, under the 1994 turnaround with producer Larry Gordon, Gordon acquired an option to acquire Fox's remaining interest in Watchmen that was never exercised, thereby leaving Fox with its rights under the 1994 agreement."More on this as it develops. Now discuss this story in CBR's TV/Film forum.