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Product placement is a tried and true method for building a brand’s awareness among an audience. The movie makes money to help offset the costs of filming, long before any box office dollars come in, and the brand in question gets noticed by millions of people, and most of the time it’s not ridiculously blatant, so it doesn’t have a great impact on the audience's enjoyment of the movie. It’s a win-win for everybody involved. Unfortunately, the most recent Transformers film did not have a perfectly smooth experience regarding its product placement. It appears they forgot to put some into the film and now they’re being sued for $27.7 million.
While the lawsuit was filed back in 2014, it is only being heard in the Chinese court system now. According to the complaint, Wulong Karst Tourism, a state-owned tourism company in China paid Paramount Pictures $750,000 to have their logo, the Chinese characters "China Wulong" featured in the final cut of Transformers: Age of Extinction. According to The Hollywood Reporter, part of the film was shot on resort property and the company wanted Chinese audiences to know this by seeing the logo. This did not happen. Now Paramount and the film’s Chinese producers, China Movie Channel, are being sued.
For their part, Paramount and China Movie Channel have apparently admitted that the logo was left out. However, they took steps to try and give Wulong Karst Tourism their money’s worth in other ways. Transformers: Age of Extinction director Michael Bay recorded and advertisement for the resort, and the production team left the props and sets that were used at Wulong Karst National Park intact, so that they could be used to attract tourists. It appears this was not viewed as sufficient reparations.
It’s not clear why the agreed upon product placement was omitted from the final film. It’s possible that the scene that originally included the logo ended up being cut from the film and it wasn’t replaced elsewhere. It’s also possible, though unlikely, that it was simply an oversight. Although, to be fair, the sheer volume of product placement in Transformers: Age of Extinction is such that maybe it just got lost in the shuffle.
Either way, this is turning into an expensive omission. Even if the court finds that the steps the producers took are acceptable and the verdict doesn’t cost them any more money, it’s still very likely that the legal fees of fighting it will make the money they made on the deal fade away.