Judge's ruling means temporary victory for JC Penney in Martha Stewart-Macy's dispute

Home Accents Today Staff -- Home Accents Today, 9/4/2012 9:55:41 AM

NEW YORK - A Manhattan judge Thursday denied Macy's request for a preliminary injunction blocking J.C. Penney from selling Martha Stewart-brand products in categories that fall under an exclusive Macy's contract.

Justice Jeffrey K. Oing last month granted Macy's a preliminary injunction blocking Martha Stewart Living Omnimedia from taking any steps under its agreement with J.C. Penney on branded products in the exclusive product categories, which include bedding and cookware. Last week's suit was filed against J.C. Penney, seeking to block it also from taking any steps under the pact.

Oing said J.C. Penney remains bound by the preliminary injunction issued a month ago. "Because J.C. Penney committed to be bound by the preliminary injunction issued by the court against Martha Stewart Living Omnimedia on July 31, the court today declined to issue an additional preliminary injunction against J.C. Penney," Macy's said in a statement. "J.C. Penney has agreed that it won't sell Martha Stewart-branded merchandise in our exclusive categories as long as the MSLO injunction is in effect." 

Business Insider reporter Ashley Lutz called it a temporary victory for J.C. Penney in that J.C. Penney can still "go ahead and plan its line with Stewart, they can't start selling the goods yet."

J.C. Penney will abide by the preliminary injunction issued last month and won't sell Martha Stewart-branded products in the exclusive product categories, Mark Epstein, a lawyer for J.C. Penney told Bloomberg reporter Chris Dolmetsch. "We're not going to take a design from Macy's, sand off the mark and knock it off," Epstein said.

Last year, J.C. Penney bought a nearly 17% stake in MSLO and announced plans to open Martha Stewart shop-in-shops starting in February 2013 as part of its efforts to revitalize its business under CEO Ron Johnson.

In denying last week's request for a preliminary injunction against J.C. Penney, the judge said Macy's didn't prove it was likely to succeed on its claims of tortious interference and unfair competition, according to an article by Karen Talley in the Wall Street Journal. Read Talley's complete report here.

The retailers will go to trial in November.