The case involves Nautilus Productions, a Fayetteville videography company.

NEW BERN — A lawsuit over Blackbeard’s wrecked pirate ship was heard by North Carolina’s Supreme Court during a special session in New Bern on Wednesday.

The ship, the Queen Anne’s Revenge, went down in the early 1700s off the North Carolina coast near Atlantic Beach and Shackleford Banks and belongs to the state. Treasure-hunting company Intersal Inc. of Florida located the wreck in 1996. (The state issues permits to companies like Intersal to find and assist in recovery of shipwrecks.)

Intersal contends in its lawsuit that the state breached a contract that gave Intersal some exclusivity to images, video and other renditions of the wreck and its artifacts. The suit also accuses the nonprofit Friends of Queen Anne’s Revenge organization of interfering in the contract.

Intersal Chairman John Masters alleges the state has misused thousands of images of the recovery of the shipwreck. Some of these images and videos were produced by Nautilus Productions of Fayetteville, a contractor for Intersal.

“Our case has been active since 2015,” Masters said prior to the hearing. “In 2013 we signed a settlement agreement with the state in a dispute arising over the contract that was signed after we first found Queen Anne’s Revenge in 1996.”

As a result of the 2013 settlement agreement, Masters said, the state agreed to publish pictures of the Queen Anne's Revenge project only on its own website, and always with a time code stamp and watermark.

According to the agreement, Masters said, Intersal also had rights to miniature recreations of artifacts for sale and received permission to hunt North Carolina waters for other shipwrecks, including the El Salvadore, a possibly treasure-laden ship that sank in 1750.

The lawsuit charges the state and the nonprofit support group with contract violations involving the El Salvador search permit, with “Undertaking a pattern of obstruction, delay, and failure to follow established procedure,” and most specifically with violation of photo and video reproduction right requirements, which he said in particular have cost the company millions of dollars in revenue.

“We did everything right,” said Masters, whose father was the original finder of the ship’s remains. “We’ve been good partners for 15 years,” he said.

Intersal gave up rights it would have had to salvaged artifacts from the wreck in exchange for exclusivity with the media rights — rights to sell photos and videos from the wreck.

Masters accuses the state of violating Intersal’s media rights more than 2,500 times. The media rights are the only income that Intersal will be able to make from the discovery of the pirate ship, he said, and “if everyone can just see all the pictures on the internet for free, who’s going to buy a book?”

The state’s attorneys argued to the Supreme Court that Intersal’s complaints have already been refused by lower courts, and that other parts of the complaints have been dealt with through negotiation.

But the Supreme Court on Wednesday did not hear the case to decide on possible contract violations. Instead, the court is to decide which of the state’s lower courts should hear it.

David Harris, attorney for Intersal, told the Supreme Court the case should be heard in Business Court, where monetary damages can be awarded. The state’s lawyers maintained the case only qualifies for administrative court, where in its opinion, it has already been settled.

The state also argued the North Carolina’s Business Court has already thrown out the case and, therefore, it should not be heard again. The state attorney general’s lawyers gave three reasons:

• The Business Court was right dismiss the claims of violation a 1998 agreement with Intersal because the 2013 agreement superseded it.

• The claims of violation of media rights should not be heard “because Intersal failed to exhaust its administrative remedies.”

• The state’s decision to not renew Intersal’s El Salvador permit was already litigated in an administrative hearing.

Chief Justice Cheri Beasley said she doesn’t know when a decision will be reached on the case. “It kind of depends,” she said. “There are lots of factors that will go in to how long it will take.”

Staff writer Paul Woolverton contributed to this report.