Macy's, J.C. Penney resume Martha Stewart courtroom tussle

Mon Apr 8, 2013 12:34pm EDT
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By Karen Freifeld

NEW YORK (Reuters) - Macy's Inc (M.N: Quote) and J.C. Penney Co Inc (JCP.N: Quote) were back in court on Monday in their fight over Martha Stewart, with Macy's claiming that some of the items Penney has begun selling on its website infringe on its exclusive deal with the home goods guru.

After a month-long mediation effort failed to yield a settlement, the trial resumed in New York state court over whether Macy's has an exclusive right to sell certain Martha Stewart home goods products.

The legal battle has hampered a key part of turnaround plans for Penney, which opened the first of its in-store home goods boutiques last week for designers Jonathan Adler and Michael Graves, and plans to open Martha Stewart shops in the coming weeks.

J.C. Penney CEO Ron Johnson has repeatedly told investors that the retailer's revamped home section would put the company back on the path to growth. Sales fell 25 percent last year.

Ahead of the Martha Stewart shop launch, Penney has begun selling some Stewart products on its website, including a set of four champagne flutes for $10 which Macy's told the court on Monday overlaps with her collection there.

"The basic shapes and designs are the same," Macy's lawyer Ted Grossman told the judge. "They compete directly against each other."

Penney's lawyer, Mark Epstein, said he had only just found out about Grossman's claim. Eric Seiler, a lawyer for Martha Stewart Living Omnimedia Inc MSO.N, said that the Stewart flutes sold by Penney are disposable plastic products and that he thinks Grossman is wrong.

Justice Jeffrey Oing said he would allow them to look into the matter.   Continued...

The sign at the entrance of a J.C. Penney store is pictured in Arcadia, California March 1, 2013. REUTERS/Mario Anzuoni