A US court has issued a preliminary injunction against discount shoe chain Payless ShoeSource Inc after deciding that its use of the American Eagle mark for footwear and bags infringes the trademark of youth apparel retailer American Eagle Outfitters Inc.

The ruling announced yesterday (16 July) now requires Payless make a clear disclaimer when using the American Eagle footwear mark to eliminate any customer confusion.

"We're pleased with the court's decision to issue a preliminary injunction against Payless," said Neil Bulman, vice president and general counsel, American Eagle Outfitters Inc.

"Our ultimate goal is to stop Payless from misleading and confusing consumers and to protect the integrity of our brand."

American Eagle Outfitters, which operates more than 900 retail stores, filed its trademark infringement and unfair competition lawsuit in April 2007 - one year after Payless acquired the American Eagle footwear mark.

It contended that Payless is deceiving consumers by portraying itself as the owner of "the youth fashion brand American Eagle" and indicating that it is selling genuine American Eagle Outfitters merchandise when in fact it is not.

Additionally, Payless is accused of marketing American Eagle shoes and accessories with advertising and promotional materials that copy the look and feel of AEO.

It is the third time in less than two months that footwear firm Collective Brands Inc, the parent of Payless ShoeSource, has been forced to settle a trademark infringement dispute.

At the end of June it agreed to pay $30m to K-Swiss Inc to settle allegations that Payless sold footwear confusingly similar to that of K-Swiss.

And earlier the same month, Collective Brands was ordered to pay $305m to Adidas America Inc after a court ruled in May that Payless infringed Adidas' three-stripe trademark. The company says it intends to appeal the ruling.