UPDATE: Hannover House’s Eric Parkinson said that he just got his cease and desist letter, and then told Pacificor’s attorneys of his proprietary rights position, and the fact that he’s got backers in place to make a movie and deliver a big rights fee to Pacificor. “We’ve arranged a meeting, we’ll show them our money and if the rational brain prevails, they’ll take the deal. If not, I can’t do it without them. You’ll have a followup next week that we are either holding hands, or not doing the film. At least we now have our meeting. I hope they will can think outside the box, because if we can make a movie that delivers a $20 million to $30 million rights payment, that is an income source they didn’t realize was possible. If not, it was a good idea anyway.”

EXCLUSIVE: A battle is brewing over Terminator 3000, a proposed 3D animated feature film that was announced by Hannover House, a division of Target Development Group that distributes specialty films and DVDs. Pacificor, the company that owns the rights to the Terminator franchise, has sent a cease and desist letter in response to a press release issued by Hannover House detailing plans to develop Terminator 3000, a $70 million animated film in conjunction with Vancouver-based Red Bear Entertainment. Hannover House CEO Eric Parkinson told me earlier today that he issued the announcement only because one of the potential production partners spoke publicly about it. He said he was awaiting reply from WME, the agency repping the Terminator film rights.

Parkinson, who once headed the home video division of Hemdale (maker of the original Terminator) said he has certain proprietary rights allowing him to make the film. “The animation rights were excluded when Hemdale sold Terminator to Carolco and when I left Hemdale, part of my settlement was that I got those rights,” Hannover told me. “However, the way the rest of the contractual rights are written, it would be dangerous for us to do this without Pacificor’s approval. They have certain intellectual rights. The best way to put it is, they can’t make an animated film without me, and we might not be able to make it without them. We are in discussions with WME, and hope we can deal with this expeditiously.”

A Pacificor spokesman shared the cease and desist letter with me, one that indicates the company isn’t looking for another project beyond what’s envisioned as two or more live action feature films that continue the apocalyptic adventures hatched by James Cameron. Here is the letter: