Macy's, Penney goes into mediation

NEW YORK (AP) -- A New York State Supreme Court Judge has ordered Macy's Inc., J.C. Penney Co. and Martha Stewart Living Omnimedia Inc. to go into mediation as a way to resolve a contract dispute concerning a partnership over the Martha Stewart brand, according to a Macy's spokesman.

The development comes as the companies were finishing up a third week in a trial over whether Macy's has the exclusive rights to sell some Martha Stewart-branded merchandise including bedding, cookware and bath items.

Macy's has sued Martha Stewart Living for allegedly breaching its long-standing contract when it signed a deal with Penney in December 2011 to open Martha Stewart mini shops in stores this spring.

Penney said won't sell any products that are deemed exclusive by Macy's before April 8 when the hearings resume.