Legal - Business - WWD.com http://www.wwd.com/business-news/legal/macys-martha-stewart-and-jc-penney-battle-in-... Page 2 <strong>of</strong> 3 2/25/2013 companies — “although you might not think so at first,” she added. Grossman then read several e-mails in which Penney’s executives imagined Lundgren’s reaction. One proclaimed the ceo would have <strong>to</strong> “start” working again, while another said Lundgren would have a migraine. Michael Francis, then president <strong>of</strong> Penney’s, said in an e-mail: “I think Terry is more likely <strong>to</strong> race past migraine <strong>to</strong> grand mal seizure.” Before ceding the floor <strong>to</strong> the defense, Grossman warned Judge Oing that in the days <strong>to</strong> come Lundgren, Johnson and Stewart should be regarded with caution. “All <strong>of</strong> them are charming, but charm can come from sincerity or it can come from something else,” he said. “The court will have the ability <strong>to</strong> assess their candor…respect for their employees, respect for the law.” Mark Epstein, lawyer for Penney’s, rerouted the focus <strong>to</strong> MSLO’s original deal with Macy’s, noting that his rival never discussed the contract in his remarks. “The contract is where this case lives,” Epstein said. “If Macy’s wins, the consumer loses competitive choices and competitive pricing.” The at<strong>to</strong>rney tackled issues regarding design and Martha Stewart trademarks. First, he said Macy’s asserts that there is a limitation on MSLO’s design capacity on product. Delving in<strong>to</strong> the contract, he noted that it never says Stewart can’t design for other entities. Epstein moved on <strong>to</strong> Macy’s claims that the “JCP Everyday” brand and the double-house logo used by Penney’s on Stewart wares refers <strong>to</strong> Martha Stewart trademarks. Earlier, Grossman argued that “Everyday” was synonymous with Martha Stewart, dating back <strong>to</strong> her deal with Kmart in the Eighties. The <strong>all</strong>eged trademark infringement claims, if valid, would violate the preliminary injunction granted by Oing over the summer, Epstein <strong>of</strong>fered. “They bring it now not because it’s a violation <strong>of</strong> the injunction,” Epstein said. “They do this because they’ve already hit a home run.” He explained the court could order <strong>to</strong> “turn the boat around” with <strong>all</strong> the Stewart for Penney’s merchandise and “go back <strong>to</strong> China, leaving the shelves empty.” Epstein also addressed the e-mails, which “paint a sinister picture.” “Ron Johnson didn’t want Martha Stewart <strong>to</strong> breach the contract,” he said, noting that, when read in detail, Johnson believed the deal would benefit <strong>all</strong> parties and increase competition. “This is not unfair competition. It’s just competition and there’s nothing wrong with that,” Epstein added. “This didn’t have <strong>to</strong> be and shouldn’t have been a blown-up claim about personalities and a vendetta against J.C. Penney and Ron Johnson. It’s a contract dispute at it’s heart.” Eric Seiler, MSLO’s at<strong>to</strong>rney, echoed Epstein, but said his client is “the little guy” in this case, just trying <strong>to</strong> “survive.” Seiler reminded the court that Stewart was a well-known brand before it got involved with Macy’s. “We own <strong>all</strong> trademarks. We own <strong>all</strong> the designs,” he said, noting that Macy’s is trying <strong>to</strong> take “credit” for Martha Stewart’s success as a brand. “This would be like Macy’s taking credit for Thanksgiving because they supported the parade,” he said with a thinly veiled layer <strong>of</strong> sarcasm. Jokes aside, the lawyer brought the focus back on the Macy’s contract, a document both defendants have pored over, as they prepared for trial.
Legal - Business - WWD.com http://www.wwd.com/business-news/legal/macys-martha-stewart-and-jc-penney-battle-in-... Page 3 <strong>of</strong> 3 2/25/2013 “There’s this effort <strong>to</strong> transform the contract <strong>to</strong> something it’s not,” Seiler said. “Terry Lundgren didn’t read the contract or write the contract, and now we’re being sued for what he hoped was in the contract. We’re being sued for the ‘hoped for contract.’” The trial continues <strong>to</strong>day at 10:30 a.m. WWD Copyright © 2013 Fairchild Fashion Media. All rights reserved.
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