UPDATE 2-Woody Allen wins $5 mln in lawsuit over his image
* Woody Allen says billboard advertisements damaged him
* Billboards showed Allen as Hasidic Jew from 'Annie Hall'
* American Apparel founder says billboards were joke (Adds details, byline)
NEW YORK, May 18 (Reuters) - American Apparel Inc (APP.A) settled film director Woody Allen's lawsuit over the company's use of his image in advertising for $5 million, Allen said on Monday as the case was about to come to trial.
The American film director sued the clothing company more than a year ago after his image appeared on billboards in New York and Los Angeles. Allen says his reputation was damaged and the image from his film "Annie Hall," which showed him dressed as a Hasidic Jew, was used without his consent.
"Five million dollars is enough to discourage American Apparel or any one else from ever trying such a thing again," Allen said outside federal court in Manhattan.
Allen, 73, who says he does not sell his image for commercial profit in the United States, said depositions revealed American Apparel believed fear of publicity would keep him from taking action.
But American Apparel founder Dov Charney had argued that the ads, which also appeared on the Internet, fell under free speech rights and were intended for comic satire and not commercial profit.
"The billboards were designed to inspire dialogue. They were certainly never intended to sell clothes," Charney said in a statement on his Web site.
Charney told reporters later: "I am not sorry for expressing myself. No one wants to be in a conflict of this kind. Again, I have respect for Mr. Allen and I have always said that."
American Apparel, one of the largest U.S. garment manufacturers, has in the past run controversial advertisements that included scantily clad young people in provocative poses. Charney has faced sexual harassment lawsuits by several former employees.
CONTROVERSIAL BILLBOARDS
In the Allen ads, the film director appears dressed as a Hasidic Jew with a beard and black hat next to a Yiddish caption that translated as "the high rabbi."
Charney said he came up with the idea in April 2007 when he was watching a dream sequence in Allen's 1977 movie "Annie Hall." At the time, Charney said he was feeling anguished over the sexual harassment lawsuits against him.
Charney, 40, said he felt a kinship with Allen's character, who was being negatively portrayed, as well as the real-life Allen, who was himself the subject of sex scandals. Continued...
