Sony recently reached an agreement with an actor who promoted its PlayStation console in dozens of television commercials over a three-year period, and then appeared in an ad touting a rival product.

Sony hired actor Jerry Lambert in 2009 to appear in a series of ads for PlayStation as the character “Kevin Butler,” a fictional vice president of Sony Entertainment who promoted Sony PlayStation video games and related products in commercials, Twitter and many Facebook postings. As a result, Lambert’s character became well-known among video game consumers.

But last year, Lambert appeared in a commercial for Bridgestone tires. The problem? Bridgestone was running a promotion offering a Nintendo Wii game console to customers who purchased a set of tires from the company, and Lambert was featured playing Wii video games in the ad.

“With the intent of unfairly capitalizing on the consumer goodwill generated by ‘Kevin Butler,’ Bridgestone has used and is using the same or confusingly similar character, played by the same actor, to advertise its products or services in the commercial,” Sony alleged in its suit against the tire retailer and Lambert’s production company, Wildcat Creek.

Sony argued that Bridgestone’s use of the Kevin Butler character constitutes a false designation of origin and false and misleading description of fact, likely to cause confusion, mistake or deceive in violation of the Lanham Act. Sony also argued that Lambert violated the terms of his contract, which provided for exclusivity, and Bridgestone tortiously interfered with that contractual relationship.

To end part of the dispute, Sony and Lambert reached an agreement. Lambert stipulated to the fact that the “Kevin Butler” character “achieved widespread fame and consumer recognition” and that “many consumers” identified the character Lambert portrayed in the Bridgestone commercial as Kevin Butler.

Accordingly, the agreement enjoins Lambert from appearing “in any advertisement, commercial, promotion, or co-promotion, in any media, that features, includes, or mentions any other video game or computer entertainment system or video game company” for a period of two years. Sony will forever retain the rights to the “Kevin Butler” character, and Lambert cannot portray him without permission.

The agreement also allows Lambert to perform in video game or computer entertainment commercials after two years, but for the first two years thereafter, he must provide Sony with ten days’ notice prior to performing in such an ad, as well as “sufficient information” so that Sony can assess whether Lambert’s intended performance violates its rights in the Kevin Butler character.

The stipulated injunction was entered as an order by the court on January 10, 2013. Pursuant to its terms, any violation of the order would cause “irreparable harm” to Sony, and the company would be entitled to immediate relief, including monetary, injunctive, and equitable relief.

To read the complaint in Sony Computer Entertainment v. Bridgestone Americas, click here.

To read the stipulated injunction order between Sony and Wildcat Creek, click here.

Why it matters: Lambert may have settled his suit, but Sony and Bridgestone have yet to reach an agreement. In response to the complaint, Bridgestone filed a motion to dismiss, arguing that Lambert played a different character in its commercial – a tire engineer – and not “Kevin Butler,” a Sony employee. The suit poses a unique legal question: does the appearance of an actor so widely known as an established character in an ad for another company create consumer confusion in violation of trademark law?