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Court temporarily blocks Penney from selling Martha Stewart goods

A man with a Macy's bag walks past the J.C. Penney's store in New York, April 11, 2013. REUTERS/Brendan McDermid
A man with a Macy's bag walks past the J.C. Penney's store in New York, April 11, 2013. REUTERS/Brendan McDermid

By Karen Freifeld

NEW YORK (Reuters) - A New York appeals judge on Tuesday stopped J.C. Penney from selling certain Martha Stewart goods in its stores until Thursday, when he is expected to decide whether to extend the block while an appeal from Macy's Inc is pending.

The decision, in effect a short-term reprieve for Macy's, was delivered in a closed hearing but lawyers for both sides confirmed it to Reuters as they left the courtroom. A trial judge had ruled on Friday that J.C. Penney could sell the items for now, as long as they did not bear Stewart's name.

The products were manufactured under the "JCP Everyday" label after J.C. Penney was barred from selling them under a Martha Stewart brand last summer.

Justice Richard Andrias in Manhattan put the goods on hold on Tuesday pending his ruling on a temporary restraining order.

Before the hearing, Theodore Grossman, a lawyer for Macy's, said he had sought an immediate order after learning the goods would go on sale in April - not May as J.C. Penney had said earlier, he said.

Mark Epstein, a lawyer for Penney, disputed that, saying a witness testified last month that the goods would be available in April.

Macy's claims it has the exclusive right to sell Martha Stewart goods in certain categories such as bedding, bath and tableware under a 2006 agreement that lasts through 2018.

The retailer sued both rival Penney and Stewart's company, Martha Stewart Living Omnimedia, after they announced a deal to launch Martha Stewart stores within Penney stores. The trial resumes Wednesday.

A Macy's spokesman and a J.C. Penney spokeswoman declined comment on Tuesday.

(Reporting by Karen Freifeld; Writing by Karen Freifeld and Joseph Ax; Editing by Gary Hill)

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