There has to be some validity to the lawsuit if they remade the entire advertisement and made another character.

The other Bridgestone ad he was in, the one testing out the football, etc. I wouldn't say that was damaging to Sony as a company, but being in a commercial that promoted their competitors gaming device seems pretty damaging. Sony pushed a lot of money into Kevin Butler as a character. Jerry Lambert starred in around 10+ Sony commercials and one of Sony's E3, so for the past few years, there have been a lot of fans that have seen him as the face of Playstation.

Here's a video that shows most of Kevin Butler's advertisements. It's missing atleast two though. The Gran Turismo 5 advertisement and the Marcus PSP advertisement he was in.

http://www.youtube.com/watch?v=ukgISn3P2nQ