In its lawsuit, FremantleMedia calls "Stripper Idol" a trademark violation that could mislead the public to believe that the TV show sponsors the event, The Dallas Morning News reported in Tuesday editions.
Advertisements for the stripping contest use a logo with a "color scheme, design and font" similar to that of the TV show. Waitresses at the club wear T-shirts emblazoned with the logo, according to the lawsuit.
"Defendants are infringing upon FremantleMedia's trademark rights," the lawsuit alleges. "There is a substantial likelihood that consumers will be confused, misled or deceived as to the sponsorship ... of the defendants' stripper talent contest."
Palazio managers initially thought the lawsuit was a joke. But they don't plan to end the Thursday night strip-off.
The club's managers say their contest doesn't resemble the TV show. In "Stripper Idol," the women have 60 seconds to dance topless, then are ranked by audience applause to win $500.
FremantleMedia can't claim the word "idol," said "Kinky" Kelly Jones, a club manager and the show's host.
"It's shocking. We're just a local company, it's not like we're some big threat," said club operations manager Scott Stevenson.
The contest is in its 12th week and has a growing popularity, club managers said.