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Macy’s Appeals Martha Decision

Lawyers for the retailer were quick to act following Judge Oing’s denial of the expansion of its permanent injunction against MSLO and J.C. Penney.

NEW YORK — Lawyers for Macy’s Inc. were quick to act and file an appeal following Judge Jeffrey Oing’s denial of the expansion of its preliminary injunction against Martha Stewart Living Omnimedia Inc. and J.C. Penney Co. Inc.

The New York Supreme Court judge ruled Friday that Penney’s would be allowed to sell goods designed by Stewart, which are branded with the “JCP Everyday” trademark and the “double-house” logo. Macy’s, which won a preliminary injunction over the summer to keep its rival from selling Stewart-branded wares in certain exclusive categories, promptly filed an appeal Monday.

Prior to the injunction denial, Oing had thrown out a slew of other claims alleged by Macy’s against the defendants, which included unfair competition, damages as it related to disgorgement and breach of confidentiality.

Filed in New York state appellate court Monday, the court papers document six appeals in total by Macy’s, the most crucial one being the denial of the injunction.

Both Penney’s and MSLO declined to comment on the appeal, which was expected by all parties involved in the trial.

“In denying Macy’s motion, the Supreme Court erred in several significant respects,” Macy’s said in appeal papers. “First, the court concluded that Macy’s had failed to establish that it would suffer irreparable harm absent a preliminary injunction. That was reversible error, for it is well-established in New York that the breach of an exclusive license agreement with respect to unique services or designs constitutes irreparable harm.”

In the documents, Macy’s outlined other ways in which it satisfied obtaining an injunction, as it moved for the appeal to be expedited.

Prior to making his ruling on Friday, Oing had difficulty accepting Macy’s’ argument that it would suffer irreparable harm should Penney’s be permitted to sell the unbranded wares. In most preliminary injunction hearings, lawyers can point to monetary damages suffered by the plaintiff, and therefore argue for the offending products to be pulled from store shelves. In this case, there was no such quantifiable damage, as Penney’s had yet to sell the goods, lawyers for MSLO and Penney’s argued.

Oing concluded that should Penney’s be unable to sell what amounts to warehouses filled with unbranded goods, it would cause the already ailing department store to “suffer” harm and potentially cause a “ripple effect” that could result in a lot of money lost, as well as jobs.

“The bottom line is, there is nothing in the contract that says if they are not branded with the Martha Stewart trademark, you cannot sell them,” the judge said shortly before delivering his verdict Friday. “I’m taking it all in, and I will decide it. The appellate court will tell me if I’m right or wrong.”

While the court of appeals sets a date to hear Macy’s’ arguments, the trial will continue Wednesday morning with MSLO and Penney’s putting on its respective cases.