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Paramount Pictures Fined in China After ‘Transformers 4’ Dispute

A court in Chengdu, China has fined Paramount Pictures and 1905 Internet Technology, its Chinese production partner, over a breach of contract dispute relating to product placement and the filming of “Transformers: Age of Extinction.”

The companies were ordered to pay $300,000 (RMB2 million) in compensation and legal costs to Wulong Karst Tourism, an inland tourist resort. The company had a contract with the film producers that would have seen the film make use of Wulong Karst’s landscapes. In return the company’s name and logo would be shown on screen within the film. Wulong Karst was also to have paid some $850,000 (RMB6 million) of sponsorship to the production. It paid only 80% of the sponsorship fee.

When the film omitted the company’s name and logo, Wulong Karst sued for $2.97 million (RMB20 million) of damages and withheld the balance of the sponsorship fee.

In April, the producers confirmed that they omitted the logo. But the court found that the film producers had attempted to reduce the damage, with Michael Bay shooting an advertisement for the resort and providing props for the resort to use.

The court also rejected Paramount and 1905’s counter suit which had sought to claim the unpaid sponsorship revenues.

Transformers: Age of Extinction” was the top performing film in China in 2014 with a gross of $320 million.

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