AEO contends that Payless, a discount shoe chain, is deceiving consumers by portraying itself as the owner of 'the youth fashion brand American Eagle' and indicating that it is selling genuine AEO merchandise when in fact it is not.

Additionally, Payless is marketing American Eagle shoes and accessories with advertising and promotional materials that copy the look and feel of AEO's distinctive marketing style and falsely claiming to be the exclusive source of American Eagle and AE 'women's', 'men's' and 'accessories', which continues to cause consumer confusion as to the relationship between Payless and AEO, according to AEO.

Neil Bulman, vice president and general counsel of AEO, said: "We're pleased with the court's decision to issue a preliminary injunction against Payless. Our ultimate goal is to stop Payless from misleading and confusing consumers and to protect the integrity of our brand."

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Fred Grover, executive vice president of e-commerce and international at American Eagle Outfitters, said: "American Eagle continuously strives to provide the best possible online shopping experience for its customers. Offering PayPal as a safe and reliable option for payment gives all of our customers the flexibility they need when shopping on our website."

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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.

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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