According to the Reuters news service, a series of ads last year (such as the one pictured) used the actors' names, voices, and faces to endorse Tutima watches. In addition to print advertisements, a clip from Righteous Kill appeared on Tutima's website. The actors claim they never gave permission for such an endorsement, and that they'd have said no if they'd been asked.
In the words of the lawsuit, De Niro has only ever endorsed a product "under very specific and compelling circumstances," and Pacino "has never commercially endorsed any product or service in the United States." The stars of 88 Minutes and The Adventures of Rocky and Bullwinkle have standards, you know. (I suspect one of those standards is that they'll do whatever you want; you just gotta pay them.)
Actors do have the right to control when their names, images, and voices are used for commercial purposes, of course. If Overture really didn't make the proper arrangements with Pacino and De Niro before allowing Tutima to use them, well ... they're gonna be in trouble. According to the Associated Press, Overture was surprised by the lawsuit, takes all legal action very seriously, etc., etc.
And this isn't the first time Tutima has been in trouble over this movie. In January, Righteous Kill's production company, Millennium Films, claimed that Tutima had failed to pay the $50,000 they'd promised in exchange for Pacino wearing their watch in the film for a few seconds. What I want to know is, what kind of idiot would deliberately piss off De Niro and Pacino? If you're going to misuse someone's picture, choose someone who won't come after you with a crowbar and beat your face in. Rainn Wilson, for example. What's he gonna do?