Woody Allen came out of the courthouse $5 million richer. American Apparel began illegally using his image on billboards last year, and Woody was not happy about it, so he decided to sue. In the process of the negotiations, American Apparel tried to smear Woody’s name by bringing up his divorce from Mia Farrow, and his marriage to Soon-Yi Previn.

It seems American Apparel’s numskull attorney didn’t help much, because Woody Allen came out victorious. The $5 million will be paid by American Apparel’s insurance company.

Both sides announced the settlement – to be paid by American Apparel Inc.’s insurance company – on the morning a trial was to start in federal court in Manhattan.

Reading from a statement outside court, Allen said he hoped the outcome “would discourage American Apparel or anyone else from ever trying such a thing again.” His lawyers said the $5 million appeared to be the largest amount ever paid to settle a lawsuit brought under state privacy statutes.

American Apparel president Dov Charney told reporters it wasn’t his decision to settle. The Los Angeles-based company’s insurance company “controlled the defense” in the case, he said.

“I’m not sorry for expressing myself,” he said.

Allen, 73, sued the trendy clothing company last year for $10 million after the advertisements turned up on billboards in Hollywood and New York and on a Web site. Using a frame from the film “Annie Hall,” the ads depicted Allen as a Hasidic Jew – long beard, side curls, black hat – and featured Yiddish text meaning “the holy rebbe.”

Court papers filed on Allen’s behalf had described the actor-director as one of the most influential figures in the history of American film and said he believes maintaining strict control over his image has been critical to his success.

The papers claimed Allen hasn’t done commercials in the United States since 1960s, when he was a struggling standup comic. The billboards, he says, falsely implied he endorsed a clothing line known for its racy advertising – a “blatant misappropriation and commercial use of Allen’s image.”

[from Huffington Post]

Of course he had originally sued for $10 million, but $5 isn’t too shabby, and according to his lawyers, it’s the largest amount ever paid under state privacy issues. American Apparel was not pleased with the suit because they took the billboards down after a week.

This is one of those ridiculous situations where you just have to think, “who decided this was a good idea?” Not only did they use Woody Allen’s image, but they also used an image from Annie Hall – technically they would also have to pay royalties for that, as well (if they had done it legally, of course).