La-di-da, one expensive billboard, la-di-da, la la.

Woody Allen scored a big $5 million pay day when he settled a dispute with clothing company, American Apparel. Allen sued American Apparel for $10 million last year, alleging that the company ran a billboard advertisement campaign featuring his likeness without his permission. The billboards were displayed for a week in Hollywood and New York in 2007 and apparently featured Allen in the black Hasidic garb he wore in a scene from 1978 Best Picture, “Annie Hall.”

American Apparel claimed that the advertisement was merely exercising its freedom of expression and was intended for comic satire and not commercial profit. In fact, company founder, Dov Charney, went so far as to claim that the billboard (with the Hebrew phrase “Our Spiritual Leader” printed over Allen’s picture) was an effort to show solidarity with Allen’s character in light of a handful of sexual harassment complaints against Charney by employees. According to Charney, “The billboards were designed to inspire dialogue. They were certainly never intended to sell clothes.” Yeah, right.

It doesn’t take a lawyer to figure out using someone’s likeness to sell a product doesn’t exactly qualify as freedom of expression.

The legal jargon is “right of publicity.” In essence, it is the right of an individual – especially Hollywood celebrities – to protect against the unauthorized use of one’s image or likeness for commercial gain. This right of publicity also extends to fictional characters such as Woody Allen’s character, Alvy Singer, in “Annie Hall.”

To make matters especially icky, American Apparel attempted to play hard ball by summoning as witnesses Allen’s former longtime companion Mia Farrow and his wife/Farrow’s adopted daughter, Soon-Yi Previn (see, I told you it’d be icky). On paper, American Apparel argued that Allen’s relationships with Farrow and Previn would show a jury that Allen’s image is no longer worth the $10 million he believes his billboard appearances merit. In reality, they tried to strong arm Allen by making a spectacle of Allen’s personal life in hopes that he would drop the suit. Allen didn’t budge.

When the judge disallowed the witnesses, American Apparel’s leverage vanished and Woody Allen added another five mill to the piggy bank. Only in America.