The Detroit automaker grafted the Nobel Prize-winning physicist's head onto the body of a toned, shirtless man in an ad published in People magazine last year.
The advertisement used the slogan "Ideas Are Sexy Too".
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Hebrew University of Jerusalem filed a lawsuit against GM earlier this month in the federal court in central California.
The case quotes Forbes magazine in 2008 as saying Einstein earned $US18 million ($A21.89 million) a year - fourth among deceased celebrities. He died in 1955.
GM spokeswoman Ryndee Carney told The Detroit News that the company had paid for the rights to use Einstein's image.
