American Apparel's 2007 outdoor campaign featured a still from Allen's 1970s film 'Annie Hall' of him dressed as a Hasidic Jew.
Now the trial is set to go to court next month and American Apparel is set bring up Allen's sexual relationship with Soon-Yi Previn, the adopted daughter of his former partner Mia Farrow.
American Apparel's lawyers are suggesting one of the repercussions of Allen's decision to sleep with his step-daughter was a downgrading of how much his image would be worth to corporate America.
The then 56-year-old Allen's relationship with the 22-year-old Previn came to light in 1992 when Farrow discovered a series of nude photographs he had taken of her adopted daughter.
Allen and Previn married in 1997.
During a subsequent custody battle over their children Farrow also accused Allen of abusing their other seven-year-old daughter Dylan. Allen was exonerated of the charge.
Allen is still regularly making films. The most recent is 'Vicky Cristina Barcelona', starring Scarlett Johnanson, Javier Bardem and Penelope Cruz and has received positive reviews.
However Allen's heyday was undoubtedly in the 1970s and early 1980s when his directed and starred in films such as 'Annie Hall', 'Everything You Wanted To Know About Sex But Were Afraid To Ask', and 'Manhattan'.
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