UPDATE 1-Penney can sell Martha Stewart goods without her name, for now -judge

Thu Apr 18, 2013 2:26pm EDT

By Karen Freifeld

NEW YORK, April 18 (Reuters) - Embattled J.C. Penney Co Inc can sell Martha Stewart goods under a "JCP Everyday" label, at least until an appeal by Macy's is decided, a New York judge ruled on Thursday.

Appeals court justice Richard Andrias rejected Macy's request for a temporary restraining order seeking to block J.C. Penney from selling the Martha Stewart goods without her name. Macy's sought the order while appealing a ruling that gave J.C. Penney the go-ahead.

The decision is another reprieve for J.C. Penney in its legal battle with Macy's over goods designed by Martha Stewart.

Macy's claims it has the exclusive right to sell Martha Stewart goods in categories such as bedding, bath and tableware, under a 2006 agreement that runs to 2018.

J.C. Penney may continue to sell the "unbranded goods" in the exclusive product categories, provided they are not associated "with the name Martha Stewart in any way or fashion," Andrias, of New York's Appellate Division, First Department, wrote in his ruling.

An "expedited" appeal will be decided by a five-judge panel.

Macy's was disappointed with the immediate ruling and looks forward to the decision on the appeal, the company said in a statement.

A spokeswoman for J.C. Penney declined comment, as did a spokesman for Stewart's company, Martha Stewart Living Omnimedia .

J.C. Penney manufactured the disputed products under the "JCP Everyday" brand after a judge barred sale of Martha Stewart-branded goods in the exclusive categories last summer.

Justice Jeffrey Oing last week denied a request to expand that ban to include the "JCP Everyday" goods.

Oing said he couldn't ignore the economic harm an adverse ruling would have caused J.C. Penney. An analyst has estimated the value of the goods at $100 million.

Macy's sued J.C. Penney and Stewart's company, Martha Stewart Living Omnimedia, after they announced a partnership in December 2011.

The cases are Macy's Inc v Martha Stewart Living Omnimedia Inc, 650197/2012, and Macy's Inc v J.C. Penney Corp. 652861/2012, New York State Supreme Court, New York County.