Macy's wins temporary stop on Martha Stewart-Penney deal

NEW YORK (Reuters) - A judge on Friday temporarily blocked plans by Martha Stewart Living Omnimedia to sell certain branded products at J.C. Penney stores.

The preliminary injunction was a win for Macy's , which has sued Martha Stewart Living claiming it has exclusive rights to sell some Martha Stewart products.

In issuing the preliminary injunction, New York State Supreme Court Justice Jeffrey Oing said Macy's had shown likelihood of ultimate success in its lawsuit.

J.C. Penney in December announced plans to open shops within its stores to sell Martha Stewart-branded goods, starting in 2013. Macy's sued Martha Stewart Living, accusing it of breach of contract by entering into the agreement with J.C. Penney.

Macy's claims Martha Stewart Living granted it the exclusive right to manufacture and sell the Martha Stewart-branded goods in Macy's lines under a 2006 agreement that, with a renewal, runs until 2018.

After Friday's preliminary injunction, Martha Stewart Living said it still planned to launch its products with J.C. Penney in the first quarter of next year. "Nothing about today's ruling changes that," the company said in an emailed statement.

"We continue to believe that we have not breached our agreement" with Macy's, the company said.

A spokesman for Macy's, Jim Sluzewski, said the retailer expected to continue to sell the Martha Stewart-branded merchandise exclusively for the full term of its contract.

The products Macy's claims exclusive rights to include soft furnishings, dinnerware and cookware.

The case is Macy's Inc. v. Martha Stewart Living Omnimedia, Inc., 650197/2012, New York state Supreme Court (Manhattan).

(Reporting by Karen Freifeld; Additional reporting by Phil Wahba; Editing by Eddie Evans and Gunna Dickson)