Testimony Over in Macy’s Martha Stewart-J.C. Penney Suits

Testimony in the trial of Macy’s Inc.’s lawsuits against J.C. Penney Co. and Martha Stewart Living Omnimedia Inc. has concluded, according to a clerk in New York state court.

J.C. Penney in December 2011 acquired a 17 percent stake in Martha Stewart Living for $38.5 million. Macy’s, which has sold Martha Stewart-branded home goods since 2007, sued her company the following month, saying it had the exclusive right to sell items in certain categories including bedding and cookware. Macy’s sued J.C. Penney about three months later.

The two suits were combined for a non-jury trial before state Supreme Court Justice Jeffrey K. Oing that began Feb. 20 and featured testimony from Martha Stewart, Macy’s Chairman Terry Lundgren and former J.C. Penney Chief Executive Officer Ron Johnson, who was ousted April 8.

The parties returned to court on April 8 to resume the trial after a monthlong break during which mediation efforts ordered by Oing failed to produce a settlement. Macy’s rested its case on April 10, and J.C. Penney called its last witnesses on April 23.

Macy’s is awaiting a decision in its appeal of Oing’s ruling from last week denying a preliminary injunction that would have prevented J.C. Penney selling Martha Stewart Living- designed goods under the label “JCP Everyday.” Richard Andrias, an associate justice with the Supreme Court’s Appellate Division, on April 18 denied Macy’s request for a temporary restraining order pending the resolution of the appeal.

Irreparable Harm

Oing said Macy’s hadn’t shown that it would suffer irreparable harm if J.C. Penney was allowed to sell the “JCP Everyday” goods. The judge said an earlier injunction he issued in July against Martha Stewart Living applied only to goods sold at J.C. Penney branded with Martha Stewart’s name in the categories exclusive to Macy’s.

The next step in the case will be for the judge to set a schedule for submission of post-trial briefs and closing arguments, Jim Sluzewski, a spokesman for Macy’s, said in an e-mail. A clerk for Oing said a schedule hadn’t been set yet and that closing arguments may come in June or July.

Martha Stewart Living and Joey Thomas, a spokesman for Plano, Texas-based J.C. Penney, and New York-based Martha Stewart Living, declined to comment on the end of testimony in the case.

JCP Everyday

Lawyers for Macy’s asked Oing in a filing dated today to allow them to reopen its case to present evidence that was not available until after the company rested on April 10. J.C. Penney and Martha Stewart Living provided Macy’s with the “JCP Everyday” trademark as it would appear on products on April 11, and J.C. Penney disclosed during an appeals court hearing five days later that it had begun selling the goods on its website, according to the filing.

The products and availability hadn’t been previously disclosed, and Macy’s subsequently commissioned a survey to determine whether consumers understood whether the products were designed by Martha Stewart, according to the filing.

“The survey definitively shows that large and statistically significant percentages of Martha Stewart fans currently associate the JCP Everyday goods, logo and trademark with Martha Stewart,” lawyers for Macy’s said in the filing. “Both this court and Justice Andrias allowed sales of JCP Everyday goods on an interim basis subject to assurance that the sales would not be associated with Martha Stewart in any fashion. The survey evidence shows that the marketing currently underway by JCP associates Martha Stewart to the products in question.”

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

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