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Macy’s and J.C. Penney in court over unfair competition

Many New Jersey businesses will experience conflicts with their competitors. Businesses are often fighting for a limited amount of customers while trying to make the most amount of money. In some situations, unfair competition can lead to commercial litigation between two businesses.

This seems to be the case between national retail giants J.C. Penney and Macy’s. The companies have been fighting for the right to carry Martha Stewart Living products in their stores. Recently, the case has gone to trial in New York.

J.C. Penney claims that as a part of its own revitalization, it acquired a 16.6 percent share in Martha Stewart Living. As part of that deal, J.C. Penney gained the right to carry Martha Stewart Living products in a so-called mini shop within its stores. The Martha Stewart Living mini shop was supposed to be one of many designers moving into similar arrangements with the department store.

Macy’s, on the other hand, claims to have the exclusive right to carry Martha Steward Living products within its store until 2018. This was part of a contract signed in 2007. Macy’s argues that Martha Steward Living is therefore prohibited from designing and selling house wares for any other store including J.C. Penney. Furthermore, Macy’s argues that they took the risk of developing Martha Stewart Living’s products and that now that it is popular J.C. Penney is trying to reap the benefits of Macy’s work.

The court has already temporarily prevented J.C. Penney from carrying products that were exclusively made by Martha Stewart Living for Macy’s. However, other new products are being allowed. The mini shops are set to open on May 1.

Commercial litigation involving contract disputes and unfair competition — like the lawsuit in this case — have the possibility of being distracting and expensive for businesses. However, with the right help, New Jersey businesses can avoid drawn out litigation and come to acceptable settlements.

Source: New Jersey Herald, “Macy, Penney to spar in court over Martha Stewart,” Anne D’Innocenzio, Feb. 20, 2013

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