This is huge Hollywood news because Warner Bros plans to release on March 2009 its highly anticipated big-screen version of the popular comic book written by Alan Moore and illustrated by Dave Gibbons. Fox was seeking to enjoin Warner Bros from going forward with the project, and U.S. District Court Judge Gary Allen Feess on Friday refused to dismiss the lawsuit filed by Fox on February 12th of this year. "In essence, the Judge appears to conclude that Fox retained distribution rights in Watchmen through the 1991 Largo quitclaim, and he concludes that, under the 1994 turnaround, producer Larry 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," a 20th Century Fox source just told me. "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." I'm told the court is still contemplating Fox's motion for an injunction. This is indeed a stunning development which could imperil Warner Bros' entire 2009 movie slate. Sources point out to me that Warner Bros had a similar problem with the Dukes Of Hazzard movie before Judge Feess and had to pay tens of millions of dollars to release the film.