Clothing retailer American Eagle Outfitters Inc. said Wednesday it won a preliminary injunction against shoe retailer Payless ShoeSource Inc., in a lawsuit alleging Payless used its trademark to market shoes and bags.
In April 2007, American Eagle filed a lawsuit in U.S. District Court in New York against Payless, saying the company marketed shoes and accessories with advertising materials that appear like American Eagle's marketing style.
American Eagle also said Payless deceived customers by indicating it is selling genuine American Eagle Outfitters merchandise when it is not.
The ruling requires Payless to issue a disclaimer saying that American Eagle by Payless is not affiliated with American Eagle Outfitters.
Mardi Larson, a spokeswoman for Payless ShoeSource parent Collective Brands Inc., said in a statement that Payless ShoeSource has the exclusive right to use the trademark "American Eagle" for shoes and certain accessories, and American Eagle Outfitters does not have the right to use the trademark for those items, under a pre-existing agreement.
The company will market its American Eagle products with a disclaimer that says, "American Eagle by Payless is not affiliated with American Eagle Outfitters" when required, Larson said.
Neil Bulman, vice president and general counsel for American Eagle Outfitters, said the company is pleased with the decision.
"Our ultimate goal is to stop Payless from misleading and confusing consumers and to protect the integrity of our brand," Bulman said in a statement.
Shares of American Eagle Outfitters added $1.26, or 9.9 percent, to close at $13.96. Collective Brands shares gained 77 cents, or 8.3 percent, to finish at $10.
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