The film was made as a co-venture by Warner Bros. and Legendary Pictures. Feess's decision came down Wednesday in the United States District Court for Central California.
Fox has been trying to stop Warner Bros. from releasing the movie which was directed by Zack Snyder. The film is slated for release on March 6, 2009.
Originally, Feess felt that the copyright issue between Fox and Warner Bros. would be settled through a trial. Now Feess feels "that Fox should prevail on crucial issues."
"Fox owns a copyright interest consisting of, at the very least, the right to distribute the Watchmen motion picture," Feess's ruling said.
Fox picked up to the rights to the Watchmen graphic novel in the 1980s with Lawrence Gordon on board as producer. Fox eventually moved on and Gordon set the property up with Warner Bros. and Legendary Pictures.
"The parties may wish to turn their efforts from preparing for trial to negotiating a resolution of this dispute or positioning the case for review," Feess stated.