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Lesbian tennis legend Martina Navratilova has settled her federal lawsuit against Do Tell Inc., a gay-friendly credit card company, for allegedly continuing to use her image in its promotions of the Rainbow Card after she canceled her endorsement of it. Court records show that U.S. District Judge Berle M. Schiller dismissed the suit after it was reported settled last week. Lawyers on both sides declined to comment on the settlement except to say that its terms are confidential. In the suit, Navratilova — who is represented by attorneys Paul J. Kennedy, Daniel J. Anders and Barbara L. Delaney of Pepper Hamilton — claimed that in the fall of 2004, she became “very dissatisfied” with the marketing and promotion of the Rainbow Card and told Do Tell Inc. to cease using her name and image in its advertisements, brochures and Web site. The legal battle was joined in March when Do Tell’s lawyers — Samuel W. Silver and Stephen J. Shapiro of Schnader Harrison Segal & Lewis — fired back with counterclaims that accused Navratilova of lodging false accusations in an attempt to “destroy” the company. According to court papers, the dispute intensified late last year when Navratilova objected to the Rainbow Card’s being associated with the cable television soap operas “The L Word” and “Queer as Folk” on the Showtime channel. In January, Navratilova allegedly told the top officers of Do Tell that she no longer approved of any association between the Rainbow Card and the Showtime programs. According to court papers filed by the Schnader Harrison lawyers on behalf of Do Tell, Navratilova called the shows “depraved” and said she believes “The L Word” misrepresents lesbians. Navratilova’s suit, filed in late March, alleged that Do Tell refused to stop using her name and image. It sought an injunction permanently barring the use of her name in connection with the Rainbow Card. In its answer, Conshohocken, Pa.-based Do Tell disputed some of Navratilova’s allegations and added counterclaims that accuse Navratilova of breaching her fiduciary duty as an officer of the company. Navratilova claimed in the suit that she founded Do Tell Inc. in January 1995 along with Pamela Derderian and Nancy Becker. But Navratilova claimed that she is “not an officer” of the company and has no management role, but instead was told that she was an “honorary officer.” But in their answer to the suit, Derderian, Becker and Do Tell disputed that claim, alleging that Navratilova is president of the company and also serves as a director. The answer also disputed Navratilova’s claim that she demanded that her name and image be removed in the fall of 2004. Instead, it said, Navratilova first made that demand just one month before she filed suit. And in an allegation that went to the heart of the dispute, the answer said that Navratilova had no right to deny Do Tell the right to use her name and image. “It is denied that Navratilova retained the right to terminate at any time her general consent and approval to the use of her name, likeness and photographs by Do Tell. To the contrary, Navratilova was obligated to consent to and approve all uses or her name, likeness and photographs during the entire term of Do Tell’s contract with the bank that issues the Rainbow Card,” the answer said. Do Tell contended in the answer that it complied with Navratilova’s demand that her name and image be removed “though it had no obligation to do so.” According to Do Tell’s counterclaims, documents created when the company was founded show that Navratilova was elected president, Derderian was elected to the positions of CEO and treasurer, and Becker was elected to the positions of chief operations officer and secretary. Navratilova received one-third of the shares of Do Tell, and in return “agreed to contribute to Do Tell the right to use her name and likeness in marketing and promoting the credit card,” according to the counterclaims. Do Tell then entered into a contract with Traveler’s Bank, which agreed to issue an affinity credit card called the Rainbow Card and Do Tell agreed to assist in marketing, promoting and advertising the card. Citibank later acquired the Rainbow Card through merger, and MBNA America Bank later purchased the Rainbow Card portfolio from Citibank. In its current contract with MBNA, Do Tell Inc. agreed to “use its best efforts to have Navratilova use her best efforts to publicly promote the Rainbow Card,” according to the counterclaim. Under its contract with the bank, a percentage of every transaction is paid to Do Tell and to the Rainbow Endowment, a nonprofit organization that “is committed to promoting the health and social well being of lesbian, gay, bisexual and transgender people,” the counterclaim said. For nearly 10 years, Navratilova permitted Do Tell to use her name and likeness in marketing and advertising of the Rainbow Card, and also helped to promote the card by attending promotional events, including one as recently as November 2004. Since the debut of the Rainbow Card, the counterclaim said, the Rainbow Endowment has received more than $1.5 million to support its charitable works, and Navratilova has received shareholder distributions of nearly $500,000. According to the counterclaim, Navratilova became dissatisfied with her share in 2003 and was paid an additional $25,000 “marketing fee” for participating in a Rainbow Card sweepstakes. But over the ensuing months, the disputes between Navratilova and Do Tell grew more heated, the counterclaim said, when Navratilova’s companion, Antoinette Layton-Lambert, allegedly made threats to Derderian to destroy the company. Derderian claims that she proposed that Navratilova either purchase Derderian’s and Becker’s shares in Do Tell Inc., or that Navratilova sell her shares to Derderian and Becker.

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