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Macy’s Appeals Ruling on J.C. Penney Martha Stewart Sales

Macy’s Inc. is appealing a New York judge’s ruling that allows J.C. Penney Co. (JCP) to sell unbranded items designed by Martha Stewart’s company in certain categories exclusive to Macy’s.

Justice Jeffrey Oing of New York state court in Manhattan on April 12 declined to expand an earlier preliminary injunction to cover products designed by Martha Stewart Living Omnimedia Inc. (MSO) and sold at J.C. Penney that aren’t branded with the Stewart name.

Macy’s said in a court filing today in state court that it met the requirements for an injunction and that Oing “erred in several significant respects.”

Oing said Macy’s, the second-biggest U.S. department-store chain, hadn’t shown that it would suffer irreparable harm if J.C. Penney was allowed to sell the unbranded goods. The judge said his earlier injunction issued in July applied only to goods branded with Martha Stewart’s name in categories exclusive to Macy’s, such as cookware and bedding.

“I cannot ignore the reality of harm to J.C. Penney even if it results from its own acts,” Oing said in denying the injunction, adding that the company could still face damages for lost profits if Macy’s prevails in the case.

Macy’s is suing both Martha Stewart Living and J.C. Penney, alleging that sales of products designed by Stewart’s company in J.C. Penney stores violates an exclusivity deal between Martha Stewart and Macy’s signed in 2006. Macy’s had asked Oing to broaden the preliminary injunction he issued in July.

Macy’s wanted Oing to extend the injunction to cover goods designed by Stewart’s New York-based company that don’t carry her name, which Plano, Texas-based J.C. Penney plans to sell under the name “JCP Everyday.”

Lawyers for J.C. Penney and Martha Stewart Living Omnimedia didn’t immediately respond to e-mails seeking comment on today’s filing.

Macy’s is seeking an expedited schedule for the appeal.

The cases are Macy’s Inc. (M) v. Martha Stewart Living Omnimedia Inc., 650197/2012; Macy’s Inc. v. J.C. Penney Corp., 652861/2012, New York State Supreme Court (Manhattan).

To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

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