US Court Bars Aerie From Selling "Overslept" Sleepwear, Citing Bad Faith
Photo: RDNE Stock project / Pexels
A federal judge in New York has ordered American Eagle Outfitters to stop selling its "Overslept by Aerie" sleepwear while a trademark case against it continues. US District Judge Loretta A. Preska granted the preliminary injunction on Monday 26 October 2026, after a hearing in Manhattan, in JS China Sourcing Inc. v. American Eagle Outfitters, Inc. (S.D.N.Y., No. 1:26-cv-08055).
The dispute
JS China Sourcing, a New York apparel maker, filed the suit on 16 September 2026 under the Lanham Act (15 U.S.C. § 1114). It says it has sold sleepwear under its federally registered OVERSLEPT mark since 2019, moving nearly 1.5 million units and more than USD 3.8 million in sales. Aerie, a division of American Eagle, launched a sleepwear line under the "Overslept by Aerie" name.
The court set the injunction request on an expedited track: the order to show cause, signed by Judge Preska on 23 September, asked American Eagle to explain why it should not be barred from selling goods that infringe the OVERSLEPT mark during the case.
Why the court sided with the plaintiff
According to the hearing transcript quoted by WWD, Judge Preska found that American Eagle "adopted the infringing Overslept mark in bad faith." She noted that the company knew about the plaintiff's mark in the fall of 2025, more than eight months before its own launch, and that a trademark search it ran in October 2025 turned up the registration. The judge also said irreparable harm "was entirely foreseeable" given the retailer's apparent plan to push the line in the holiday season.
Under the order, Aerie must stop selling Overslept-labelled goods. Reports say the retailer had already pulled the line from its website after the suit was filed but kept it in stores, and that it may relabel stock rather than remove it. American Eagle said it does not comment on pending litigation and that the judge has directed the parties to work together on next steps. It can still appeal, and the case can go on to a trial on a permanent injunction and damages.
Why it matters
Clearance searches only protect a brand if the results are acted on. Here, the search that found the earlier mark became evidence of bad faith, which weighed heavily in the plaintiff's favour at the preliminary stage. For brands expanding into a new product line, including those selling into the US from Asia, the lesson is simple: if a search turns up a registered mark for the same goods, change the name before launch, not after the lawsuit.
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