AUSTIN – The half-naked, spike-heeled strippers writhing onstage at the Palazio Men’s Club “Stripper Idol” contest are a far cry from celebrity stardom – even if they win.

But that hasn’t stopped the mega-media company that owns American Idol from suing the Austin club in federal court.

FremantleMedia, which owns the country’s most-watched TV show, says Palazio’s weekly amateur stripping contest is a trademark violation, one that tarnishes the company brand and could lead the public to believe the TV show is sponsoring the event.

Attorneys for FremantleMedia North America, who did not return repeated phone calls, have sued the club in U.S. district court, seeking to end the contest and seize Palazio’s profits.

Palazio managers, who first thought the lawsuit was a joke, say they have no intention of ending the Thursday night strip-off.

They say the contest – where girls have 60 seconds to dance topless, then are ranked by audience applause to win $500 – bears no resemblance to the hit TV show.

If anything, the suit has brought the club national attention: The contest, now in its 12th week, is growing in popularity.

“It’s lots of amateurs: women who come in with their husbands, ladies that come in with their friends. Last week we even had a big girl win,” said club operations manager Scott Stevenson, reclining in a plush chair in Palazio’s VIP section. “It’s shocking. We’re just a local company – it’s not like we’re some big threat.”

On Thursday night, a dozen amateur strippers signed in for Stripper Idol, giving stage names like Zephyr, Sexy, Goldie, Mercedes. In the dressing room, they slipped out of jeans and sweatshirts and into their exotic dancer garb: 6-inch platform heels, tiny bikini tops and nearly invisible thongs. Tattoos sprawled across salon-tanned skin.

After hearing about the Stripper Idol lawsuit on TMZ, a celebrity gossip Web site, Peyton Watson and Nicole Williams, 20-year-old friends who met working at Hooters, drove nine hours from Amarillo to compete. They listened closely to the house rules – they’re too young to drink alcohol but old enough to give $20 lap dances – before lacing up their knee-high boots.

“It’s nerve-racking, sure, but it’s $500,” said Williams, who went by the stage name Hayley. As she giggled, she held out two shaking French-manicured hands.

“It’s a one-time thing because we need the money,” added Watson, a shock of black hair grazing her pierced lips. She called herself Zephyr.

FremantleMedia’s lawsuit takes issue more with the club’s marketing than with the contest itself. The suit notes that Palazio uses the word “idol” in the contest name – a direct link to American Idol, which starts its new season Tuesday. And it has designed a contest logo that uses a “color scheme, design and font” mirroring that of the TV show. In addition to using the logo in advertisements, the club has waitresses wear T-shirts emblazoned with it – T-shirts cut, tied and tailored in revealing ways.

“Defendants are infringing upon FremantleMedia’s trademark rights,” the suit said. “There is a substantial likelihood that consumers will be confused, misled or deceived as to the sponsorship… of the defendants’ stripper talent contest.”

Manfred Westphal, a Fremantle senior vice president, declined to elaborate on the suit. “We have no comment,” he said.

The suit’s claims are hogwash, said “Kinky” Kelly Jones, a club manager and the show’s emcee. Fremantle can’t lay claims to the word “idol,” he said.

“That word is biblical,” he said, “and has been around for thousands of years.”

And while Stevenson said the club would alter the logo if necessary, he added that he thought the whole suit was a bum deal.

“I didn’t know you could copyright an oval,” he said.

After midnight, when Jones finally took the microphone, the girls lined up backstage, a blur of rhinestones and lace and crumpled dollar bills.

Under the smoky haze of strobe lights, each stripped for a minute, flipping hair extensions and gyrating around a brass pole to pulsating hard-rock ballads. Some looked skittish, like they’d been practicing in their living room. Others, like Zephyr and Hayley, had the look of old pros – though they swore they’d only stripped “a few times.”

When the lights came up and the audience roared, it was Zephyr and Hayley in a tie for the money – and the nearly naked girls embraced gleefully. Finally, Hayley narrowly won – but they both got gas money to get back to Amarillo