Hilton sued the company in 2007 after it began selling without her permission birthday cards of a cartoon of a waitress serving a plate of food to a patron. A photo of Hilton's face was pasted on the cartoon's body.
Hilton alleges that the card ripped off her appearance as a waitress in an episode of her reality television show "The Simple Life."
The 9th U.S. District Court of Appeals on Monday upheld a lower court's ruling allowing the bulk of Hilton's lawsuit. Hallmark has defended the card as parody, which is normally protected under fair-use law.