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Rent-A-Center and Aaron's Headed to Court
03-10-10
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As a result of its course of conduct, as well as the pledges it has made, Aaron's has assumed the duty to, among other things, properly investigate and confirm the statements it is going to make regarding its target competitor before it hauls-off and makes false statements in a calculated design to mislead consumers to do business with Defendant instead of Rent-A-Center.
From court documents filed by Rent-A-Center today

Aaron's circular

Image of an Aaron's circular showing the RAC logo and price comparisons. Inset is an enlargement of the comparison grid.

In a civil suit filed today in United States District Court for the Northern District of Texas, Rent-A-Center (NASDAQ:RCII) accused Aaron's (NYSE:AAN) of unfair competition and false advertising. Aaron's and Rent-A-Center are the to largest rent-to-own operators in the United states. Combined, the two companies operate nearly 5,000 locations - half of all stores in the U.S. offering rental-purchase transactions.

Neither company has released an official statement regarding the suit. Quotes in this story are from court documents obtained by RTO Online. See Rent-A-Center v Aaron's court documents.

Related: Funny or Die; Aaron's Seeks Identity of Video Blogger.

"Fair competition is the foundation for the American system of free enterprise," Rent-A-Center stated in court documents. "Therefore, when a company violates the basic tenets of fair competition with false advertising, it strikes at the heart of this system."

RAC says it favors of free and fair competition. "However, Defendant should be held accountable for its false advertising."

Rent-A-Center is also disputing Aaron's method of researching prices for comparison in its ads. In today's filing, RAC states that Aaron's, "...apparently makes 'secret' calls and/or visits to RAC stores, as a purported method to investigate and provide truthful information regarding the company Defendant seems to consider its main target: RAC. Whether or not just a ruse to cover its tracks, Defendant has engaged in such practices."

Specifically, Rent-A-Center claims that, in advertisements disseminated across the country, Aaron's falsely stated RAC provides a one year warranty when in fact RAC services and maintains its merchandise on rent for the duration of the rental agreement. Then, in the same advertisements, Aaron's compares RAC's one year warranty, with Aaron's two year warranty.

Rent-A-Center also claims that Aaron's ads stating "Delivery and Set Up is Always Included" are misleading. Especially, says RAC in its court filing, "When a consumer is comparing RAC's merchandise, where delivery and set-up really are provided at no extra charge."

Rent-A-Center claims that Aaron's has violated the basic tenets of fair play. "As a result of its course of conduct, as well as the pledges it has made, Defendant has assumed the duty to, among other things, properly investigate and confirm the statements it is going to make regarding its target competitor - -before it hauls-off and makes false statements in a calculated design to mislead consumers to do business with Defendant instead of RAC."

This is not the first time RAC and Aaron's have lawyered up on trademark issues. Says RAC, "Despite letters, a prior federal lawsuit before the Honorable Judge Kinkeade, and arbitrations initiated against Defendant by RAC, Defendant continues such false and misleading advertising practices."

The Rent-A-Center suit against Aaron's contains 5 counts:

1. False Advertising/Unfair Competition Under Section 43(a) of Lanham Act
2. Injurious Falsehood - -Business Disparagement
3. Tortious Interference With Contractual Relations And/Or Prospective Business Advantage
4. Negligence And/Or Gross Negligence
5. Unfair Competition

Excerpts from court filing:

Defendant commenced its most recent, unfair assault on RAC, with the debut of its false comparison regarding RAC's alleged warranty. In particular, Defendant published and disseminated, or caused to be published and disseminated, certain marketing materials containing literally false and/or misleading statements concerning RAC's alleged warranty. These marketing materials include newspaper advertisements that incorporate the RAC Service Marks in a false and/or deceptive manner.

More specifically as it concerns this lawsuit - - on the very first page of various such advertising materials - - Defendant uses the RAC Service Marks with regard to a Panasonic 37" television or LG 47" television, and states that RAC provides a one year warranty with regard to that item. Then, in a false and/or misleading comparison, the advertising materials state that Defendant provides a two year warranty on that item.

Rent-A-Center is seeking a permanent injunction against Aaron's use of its logo as well as unspecified monetary damages. In addition, RAC asked the Court to force Aaron's to publish what amounts to a retraction to all consumers who viewed the alleged misleading ad "...in the same markets, states and locations as done with the Advertising Materials, presented in both English and Spanish, a clear and conspicuous written notification on the initial page of such communications pre-approved in writing by Plaintiffs, which clearly communicates that Defendant's prior statement regarding the alleged RAC warranty and "DELIVERY & SET UP IS [sic] ALWAYS INCLUDED" in the Advertising Materials was incorrect, and including a statement to be prepared by Plaintiffs regarding the actual services provided by RAC."

All information for this article was taken from court filings.

 

 

 

 

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