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J.C. Penney to soon learn fate of its Martha Stewart home 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) - J.C. Penney Co Inc will likely learn in August whether it can sell certain Martha Stewart-branded home goods it has been prevented from stocking due to a lawsuit by rival Macy's Inc .

Closing arguments in the lawsuit have been scheduled for August 1, Macy's attorney Theodore Grossman said on Monday.

Justice Jeffrey Oing, who is presiding over the case, has said he will render a verdict soon after summations.

Macy's, which claims exclusive rights to Martha Stewart cookware, bedding and bath products, sued Penney and Martha Stewart Living Omnimedia Inc after the two companies announced a partnership in December 2011. Macy's claims the deal breaches its contract with the domestic diva's company.

The verdict will determine whether J.C. Penney can sell Martha Stewart-branded goods in categories claimed by Macy's in Martha Stewart stores within Penney.

The judge also will decide whether Penney can sell certain Martha Stewart-designed goods without her name.

Until the judge rules, J.C. Penney cannot sell products in Macy's exclusive categories under the Martha Stewart brand. But it can sell a line of home goods designed by Stewart under the "JCP Everyday" label.

While hearing the case, the judge allowed sale of Penney's existing inventory of "JCP Everyday" goods, saying he could not ignore the economic harm an adverse ruling would have caused Penney. But he said Macy's could be entitled to damages.

Former J.C. Penney Chief Executive Ron Johnson viewed Martha Stewart as key to his vision for remaking the struggling retailer. Johnson, who failed to win over shoppers and investors, was ousted April 8.

In addition to "JCP Everyday" products, J.C. Penney is already selling Martha Stewart-branded party goods, curtains and other products not claimed by Macy's.

A non-jury trial started in New York state court in February. Testimony ended in April and post-trial briefs were filed May 31.

The August 1 date for closing arguments was set Monday morning, Macy's attorney Grossman said when asked about the case. The date has not yet been recorded in the court calendar.

The case is Macy's Inc v Martha Stewart Living Omnimedia Inc, 650197/2012, New York State Supreme Court, New York County.

(Reporting By Karen Freifeld; Editing by David Gregorio)

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