It will be a very important court case, and perhaps a sign of troubled times when a company that is searching aggressively for profit invites itself to a scandal in order to get attention.

It's not necessarily a new strategy.  Video game maker Electronic Arts (ERTS), for example, just released Godfather 2 complete with young bare-chested pixilated girls which can be found at your local Toys R' Us.  Of course, the movie never even had a hint of sexuality, but when the publisher noted that their mediocre reviewed game needed an extra kick, they invited some sex and scandal.

Woody Allen was an easy target for the clothing maker.  The Woody Allen fan demographic is the complete opposite of what American Apparel (APP) goes after, so why not start a war to get attention?  Woody Allen, the peculiar artist that he is, is well known for staying away from Hollywood and commercial promotion.  Surely, the advertising staff at American Apparel were aware of the need to license Mr. Allen's image when they plastered giant billboards of him dressed as a Hassidic Jew from his award winning movie, Annie Hall.

Woody Allen has filed suit for 10 million.  With 545 million in revenue in 2008, it seems like peanuts for American Apparel.  They can write off the expense as an unusual legal matter and it will be ignored by investors.  In fact, investors may even applaud such a bold move.  Getting this type of attention is not easy, and American Apparel is now taking it a step further, ready to make issue of Mr. Allen's unusual sex life.

At the same time, it's a sick strategy and reminds us that we are in sick times, when a powerful corporation resorts to exploiting their position of legal safety by going after an individual for better profits.  In this case, it's a famous and moderately wealthy individual who made a high profile controversial decision in his life, but nevertheless an individual.  If Mr. Allen were to lose this case or settle for much less, look for more corporations to quickly go after people like Mike Vick and Nadya 'Octomom' Suleman who are much easier targets.  It's nothing new, but in good economic times, it would perhaps be looked at with more moral judgment and bad taste by the company's board of directors and executives.  But as the saying goes, "desperate times call for desperate measures."

Woody Allen is no Mike Vick, however.  So look out Mel Gibson or any public figure that makes a mistake or questionable decision.  Corporate executives have indemnity, and they are not afraid to use it.