Rex Features
The posters from the clothing brand appeared for one week at sites in New York and Hollywood and featured a still photograph of Allen dressed as a Hasidic Jew from his 1977 movie Annie Hall.
Allen said: "They're not classy. If I'm going to do a commercial, it would have to be for, as I said, a large amount of money.
"It would have to be very clever, kind of witty or intellectual-style commercial, and it would have to be for a product that would enhance my image."
American Apparel claimed that Allen's image rights are not worth the $10 million he is suing for because of the damage allegedly already done to the director's reputation by his marriage to adopted daughter Soon-Yi Previn.
Allen's lawyers have said that the firm's request for court documents regarding the withdrawal of endorsements after his marriage was "vexatious, oppressive, harassing" and not relevant to the case.
