By Jonathan Stempel
NEW YORK (Reuters) - The celebrity and heiress Paris Hilton may pursue her lawsuit against Hallmark Cards over its use of her picture and catchphrase "That's hot" on a greeting card, a federal appeals court ruled on Monday.
Hilton had contended that Hallmark violated her privacy and right of publicity by ripping off a scene from her reality TV show "The Simple Life" on a birthday card captioned "Paris's First Day as a Waitress."
A three-judge panel of the U.S. 9th Circuit Court of Appeals rejected Hallmark's argument that its depiction of the Hilton Hotels heiress was protected speech as a matter of law.
It sent the case back to a lower court, which had turned aside Hilton's claim of trademark infringement but rejected other Hallmark defenses.
Lincoln Bandlow, a lawyer at Lathrop & Gage LLP in Los Angeles representing Hallmark, said "the analysis of the First Amendment defense is incorrect. It will leave a lot of speakers subjected to meritless right of publicity claims."
He said Hallmark will evaluate options including a possible appeal to the full 9th Circuit or the U.S. Supreme Court.
Brent Blakely, a lawyer for Hilton, was not available for comment.
The card showed Hilton's face superimposed on a cartoon of a waitress serving a plate of food to a restaurant customer.
Hilton tells the customer, "Don't touch that, it's hot." The customer asks, "What's hot?" Hilton responds, "That's hot." The inside of the card reads "Have a smokin' hot birthday."
The appeals court rejected Hallmark's argument that the card was sufficiently "transformative" as to deserve automatic protection because the setting was different and the phrase "that's hot" referred to the temperature of a plate of food.
While noting differences from the TV show, including that the cartoon body was of a generic female and not Hilton, Judge Diarmuid O'Scannlain said "the basic setting is the same: we see Paris Hilton, born to privilege, working as a waitress."
He concluded that Hilton "has at least some probability of prevailing on the merits before a trier of fact."
The private equity firm Blackstone Group LP took control of Hilton Hotels Corp in 2007. Hallmark is privately held and based in Kansas City, Missouri.
The case is Hilton v. Hallmark Cards, U.S. 9th Circuit Court of Appeals (Pasadena), No. 08-55443.
(Reporting by Jonathan Stempel; Editing by Gary Hill)