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Judge rules JCPenney interfered with Macy’s contract

(Business News) New York State Supreme Court judge rules J.C.Penney violated Macy’s exclusively held contract with Martha Stewart Omnimedia Inc.

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The Martha Stewart product drama continues

A New York State Supreme Court judge ruled in favor of Macy’s who claimed J.C. Penney interfered with an exclusive merchandising contract Macy’s held with Martha Stewart Living Omnimedia Inc., when J.C. Penney cut a deal, in 2011, to create a collection of home goods. However, the judge, Jeffrey Oing, also stated Macy’s failed to prove that J.C Penney was liable for punitive damages since the actions were neither “malicious” nor “immoral.”

According to the Washington Post, Oing stated: “Macy’s should not be awarded punitive damages since such damages are only proper if Penney’s conduct in ‘perpetrating the tortious interference of contract was wanton, reckless, malicious, and evinced a high degree of immorality.’”

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Macy’s is however, entitled to attorney’s fees and other damages from JCP relating to the selling of a line of bath towels, pots, and other products that were designed by Martha Stewart, but sold under the JCP Everyday name, as this violated the exclusive contract Macy’s held with Martha Stewart. The exact amount of damages has yet to be determined as Judge Oing ordered those issues to be addressed by a judicial hearing officer, or a special referee.

Macy’s says they had to protect their rights

Oing noted in the 63-page decision that the preponderance of evidence demonstrates that JCP’s top executives were “less than admirable.” Perhaps he is referring to the move JCP made last fall to scale back its promotion of Martha Stewart merchandise. For some reason, most likely they felt the pressure looming from violating the exclusive contract; they opted to stop selling home and bath products and opt to sell party supplies, window treatments, and other items not covered by the exclusively held Macy’s contract.

The agreement was reached by JCP’s returning CEO, Mike Ullman as a means to fix the previous CEO, Ron Johnson’s mistakes. Johnson had signed a 10-year deal with Martha Stewart in December of 2011 as a way to reinvent the store, but was sued a mere month later by Macy’s. (Macy’s sued Marth Stewart Living Omnimedia as well).

Macy’s released the following statement: “It is a great shame that Macy’s had to expend time, money and the diversion of its resources in order to protect its rights. We look forward to the damages phase of the case.” I think JCP should be saying the same thing. They invested nearly $40 million in preparations for distributing the Martha Stewart brand and instead of making money and reinventing their brand; they will be paying attorney fees and monetary damages to Macy’s. This is proof that a CEO can make or break your company.

JCP is considering options for an appeal, stating, “[they] respectfully disagree with and are disappointed with this outcome.”

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Business News

Former Budweiser exec says marijuana is the new craft beer

(BUSINESS NEWS) In light of a growing consumer demand and more states decriminalizing and legalizing, “Big Booze” casts sights on burgeoning marijuana market.

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Imagine all the Instagram photos. Imagine all those new hashtags (no pun intended).

A carefully placed pre-rolled joint next to a latte with a heart drawn in the foam, an iridescent glass pipe freshly filled held out at arm’s length with a mountain and a sunset at the horizon, and different strains or arrays of edibles displayed next to their branded packaging.

Weed: “It’s the new craft beer,” according to former marketing exec for Anheuser-Busch, makers of Budweiser beer, Chris Burggraeve.

Since leaving his position as Chief Marketing Officer, Burggraeve has begun investing in the marijuana industry, recently joining the advisory board of greenRush Group, the San Francisco-based startup that aims to be the “Amazon of weed” as the largest technology platform in the cannabis industry.

In addition to greenRush, Burggraeve also co-founded Toast, a company that makes luxury pre-rolled joints.

Research firm Cowen and Company released their findings last year that in legalized states such as Washington, Colorado, and Oregon, people have begun laying off the sauce as beer sales took a noticeable dip below the national average. According to a Gallup poll released last month, 64 percent of the U.S. population now wants to lift the federal ban on marijuana.

It was only a matter of time before those in the alcohol industry began to take notice. Just last month, Constellation Brands, the beer distributor who owns Corona and Svedka vodka, bought a 9.9 percent stake in Canopy Growth Corporation, an acquisition in anticipation of nationwide legalization of marijuana in the U.S.

Big companies like Amazon, however, have shied away from taking such leaps in the industry due to the current federal ban.

“This is one of the fastest-growing categories globally,” Burggraeve told Bloomberg. “When consumers want something, you ignore it at your peril,” also noting that in order for booze companies to stay relevant in some fashion, they will have to conform to cannabis, whether they want to or not.

“The same way that craft beer started and, for the longest time, was ignored and then exploded, there’s no reason why the same thing wouldn’t happen in this space,” Burggraeve added, also noting that his colleagues should follow suit lest be left in the dust. “There will be part supplementing and part complementing. The jury is out on how and where that will happen.”

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FCC nixed a 40+ year old rule blocking broadcast media mergers

(BUSINESS NEWS) The FCC is on a tear this month, this time dismantling a decades-old rule that supporters and critics are butting heads over.

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In a 3-to-2 vote last week, the Federal Communication Commission (FCC) rolled back media merger rules that have been around since the 1970s. These 42-year-old regulations prevented a handful of companies from owning the majority of media outlets in a market.

One now defunct rule stipulated TV stations in the same market couldn’t merge if the combo would mean there were fewer than eight independently owned stations as a result. Another rule prohibited a single company in a market from simultaneously owning a TV station and a daily newspaper.

Additionally, the original stipulations restricted how many TV and radio stations a company could own in a single media market. The FCC also approved Next Gen TV, a new broadcast standard expected to improve targeted ads as well as higher quality video and audio for on-air television.

Further easing media creation, last month, the FCC voted to nix a rule that required broadcasters to have a physical studio in their licensed market.

FCC Chairman Ajit Pai says these long-standing rules have made it difficult for smaller outlets like websites, blogs, and podcasts to thrive in a media landscape vastly different from the one that originated the regulations.

“Few of the FCC’s rules are staler than our broadcast ownership regulations,” Pai said. By eliminating them, he said, “this agency finally drags its broadcast ownership rules to the digital age.”

The National Association of Broadcasters agreed with Pai, welcoming the changes. In a statement they noted the old rules “weakened the newspaper industry, cost journalism jobs and forced local broadcast stations onto unequal footing with our national pay-TV and radio competitors.”

However, opponents argue this change will lead to media monoliths, with even fewer companies controlling most media outlets. “Instead of engaging in thoughtful reform,” said Democratic FCC Commissioner Jessica Rosenworcel, “this agency sets its most basic values on fire.”

Predictably, shortly after the vote, Comcast hit up 21st Century Fox all like, “Hey let us buy those parts of your company Disney wanted earlier this year but now we can have it because the FCC said so, I hope.” Previously Fox was talking about selling most of the company to Disney but keeping sports and news. Although the talks aren’t ongoing, apparently there may still be a Disney/Fox deal on the table. Verizon also noted interest in acquiring portions of Fox as well to provide mobile streaming content.

Senate Democrats called on the FCC inspector general to launch a probe regarding impartiality of the vote.

They cited concerns about how the deregulation may benefit conservative broadcasting company Sinclair, who expressed interest in buying Tribune Media for $3.9 billion dollars. This purchase could now be possible without Sinclair selling off their other stations to receive FCC approval.

“This merger would never have been possible without a series of actions to overturn decades-long, settled legal precedent by Chairman Pai,” wrote 14 lawmakers in a letter. Sinclair declined to comment, while Pai merely assured these changes “will open the door to pro-competitive combinations that will strengthen local voices.”

Guess we’ll just have to see how things go when Disney and like three other companies own everything.

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Business News

Apple under fire for alleged patent infringement

(BUSINESS NEWS) Apple is again under fire for patent infringement, this one appearing to be less patent-trolly than some other claims.

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Apple is once again being investigated by the U.S. International Trade Commission (USITC) for a possible patent infringement.

The investigation is looking into a complaint from Aqua Connect Inc and its subsidiary, Strategic Technology Partners. They are Nevada-based companies with headquarters in Orange, California, filing their complaint with the US District Court for the Central District of California.

Apple is already being investigated by USITC because Qualcomm claims that the company is using in violation of its patent by using Qualcomm’s modems to power devices like iPhones.

Earlier this month, Apple was also sued by an Israeli company, Corephotonics, which claims that the tech giant has used its patented designs in the dual lens cameras on iPhone 7 Plus and iPhone 8 Plus.

Likewise, Aqua Connect and Strategic Technology Partners claim that the company is using their patented technology without consent for features like screen-sharing and remote desktop on some MAC computers, iPhones, iPads, iPods, and Apple TVs.

It appears that the USITC investigation will look into these claims, but may take a broader view and look into other possible patent infringements.

“Initially, our product had Apple’s full support. But years later, [they] built our technology into its macOS and iOS operating systems without our permission,” says Ronnie Exley, CEO of Aqua Connect.

Apparently, Aqua Connect created the first remote desktop for Mac computers in 2008, but later they incorporated that technology into new products without permission from Aqua Connect. “These lawsuits seek to stop Apple from continuing to use our technology in their macOS and iOS operating systems,” said Exley in a statement.

Because the USITC has the power to ban the sale of products in the U.S., most companies choose to settle out of court rather than risk such a ban. It remains to be seen how Apple will ultimately respond.

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