May 19, 2009, 12:00 AM

No joke: American Apparel will pay Woody Allen $5 million to settle lawsuit

The filmmaker had sued over use of his image by American Apparel on billboards, in stores and on its web site. The two sides settled just before the case was set to go to trial yesterday in New York.

Manufacturer and online retailer American Apparel Inc. has agreed to pay filmmaker Woody Allen $5 million to settle a lawsuit over use of Allen’s likeness on two billboards and in American Apparel stores and on its web site. The two sides settled just before the case was set to go to trial yesterday in New York.

Allen filed the suit in March 2008, nearly a year after American Apparel, which is known for controversial and sometimes racy advertising, had put up billboards in New York and Los Angeles showing an image of Allen as a Hasidic Jew from a scene in Allen’s movie “Annie Hall.”

Dov Charney, CEO of American Apparel, No. 236 in the Internet Retailer Top 500 Guide, explained in a lengthy blog post on the company’s web site that the point of showing a scene in which Allen felt uncomfortable was to draw a parallel between Charney, who had been getting unwanted publicity over sexual harassment lawsuits filed against him, and Allen, who had been accused publicly of molesting his daughter. Charney said in the blog posting that the sexual harassment charges against him had been disproven.

Charney also said in the blog post that most of the $5 million settlement will be paid by American Apparel’s insurance carrier “who is responsible for the decision to settle this case and has controlled the defense of this case since its inception. Naturally, there is some relief of not having to go through a trial but I also harbor a sense of remorse and sadness for not arguing an important issue regarding the First Amendment, particularly the ability of an individual or corporation to invoke the likeness of a public figure in a satiric and social statement.”

Allen said in a statement, “American Apparel calculatingly took my name, my likeness, and image and used them publicly to promote their business. Threats and press leaks by American Apparel designed to smear me did not work and a scheme to call a long list of witnesses who had nothing to do with the case was disallowed by the court. I hope this very large settlement will discourage American Apparel and others from doing this type of thing to myself or others in the future.”

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