By Karen Freifeld
NEW YORK, April 30 An appeals court ruled on
Tuesday that J.C. Penney Co Inc can keep selling a line
of home goods designed by Martha Stewart, pending a verdict in
Macy's Inc lawsuit to stop Penney from selling the
New York State Supreme Court's Appellate Division, First
Department, denied Macy's request for a preliminary injunction
blocking sale of the goods Penney began selling them last week,
using the "JCP Everyday" brand instead of the Martha Stewart
Macy's, which claims it has exclusive rights to certain
Martha Stewart products, sued its Plano, Texas-based rival and
Stewart's company, Martha Stewart Living Omnimedia, after the
two companies announced a partnership in December, 2011.
A non-jury trial started in New York state court in
February. Testimony ended last week and post-trial briefs are
due May 31. It is unclear when a verdict will be rendered.
Macy's claims it has the exclusive right to Martha Stewart
cookware, bedding and bath products, even without her name.
Martha Stewart is Macy's number one home brand.
J.C. Penney decided in September to manufacture Martha
Stewart-designed goods under the "JCP Everyday" label after the
trial judge blocked their sale under her name.
Tuesday's ruling upholds an April 12 decision by Justice
Jeffrey Oing of New York State Supreme Court, who refused to
expand the block to include "JCP Everyday" products.
Oing said he could not ignore the economic harm an adverse
ruling would have caused Penney, even if it was a result of
their own acts. An analyst has estimated the value of the goods
at $100 million. The appeals panel did not give any reason for
In addition to the "JCP Everyday" products, Penney is
stocking Martha Stewart-branded party goods, curtains and other
products in categories not claimed by Macy's.
Theodore Grossman, a lawyer for Macy's, said the retailer
is disappointed with the appeals court decision but that Macy's
is looking forward to "full relief" at the end of the case.
In the meantime, he said Penney is barred from selling
Martha Stewart-branded kitchen, bath and bed goods, and Stewart
is prohibited from promoting "JCP Everyday" products.
A spokeswoman for Penney declined comment, and a spokesman
for Martha Stewart did not return a call for comment.
Former J.C. Penney Chief Executive Ron Johnson viewed
Martha Stewart as key to his vision for remaking the struggling
retailer. Johnson, who failed to win over shoppers and
investors, was ousted April 8.
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.