If Warner Bros. is to be believed, the studio is going to fight to the death to keep from making a payout to Fox. Their lawyers are running around swearing that a settlement is "unlikely," that they will prevail on appeal or at trial, that tonight they dine in hell, etc.
Don't believe it. Warner Bros. will pay up. Events over the next couple of weeks may determine how much they'll have to pay. But I would be astonished if Watchmen misses its date with the multiplex.
No one wants to go to trial in the best of circumstances. Something like 95% of all court cases settle. When it comes to big, multi-million dollar brawls between huge corporations, that number jumps even higher. Trial is expensive. Warner Bros.' legal fees would be astronomical. Trial is uncertain. Juries are unpredictable. You could be clearly right and still lose.
Furthermore these are not the best of circumstances for Warner Bros. I'll skip over most of the legal-speak involved here, but the crucial fact is that the judge has already decided the biggest issue in the case: whether Fox owns a distribution right in Watchmen. It's a done deal. The jury's not getting another crack at it. What's left to decide is stuff like damages and whether Warner Bros. should be enjoined from releasing the film. So even the best case scenario for Warner Bros. at trial isn't that great. To take a risk like that would be... Well, I repeat that I'd be astonished.