John Cleese, Michael Palin, Eric Idle, Terry Gilliam, Terry Jones and the estate of Graham Chapman won a High Court judgment yesterday which found that two deals covering the film's broadcast were invalid.
Mr Justice Rattee said that the deals suppressed the true value of the film. Channel 4 bought broadcast rights in two packages of films, including Life of Brian, from the Canadian distributors Paragon Entertainment Corporation. All the rights in the film now revert to the Python team.
Paragon obtained the rights to the film for $8m in 1994 from its producers, George Harrison's Handmade Films. The judge ruled today that all the subsequent deals were invalid because Paragon broke its guarantee that the Python team would have the right to assess sales and make cuts to the film.
A Channel 4 spokesman said the channel is examining the judgment closely and will "consider grounds for an appeal against it". He added: "We are obviously disappointed that the channel has lost the rights to show this film because of the actions of another company about which we knew nothing at all .... We consider ourselves the innocent parties in this case."
He said the channel had entered in "good faith into a straightforward commercial deal" and added "we have enormous respect for the Monty Python team and regret having been drawn into this litigation".
James Munby QC, representing the Python team had told the judge that Channel 4 had entered into the deal with Paragon "with their eyes open" and were guilty of inducing the breach of contract by Paragon.