NEW YORK (AP) -- A New York appeals court is allowing J.C. Penney (NYSE:JCP) to continue to sell a new line of home goods designed by Martha Stewart.

The ruling, which came Tuesday, rejects Macy's (NYSE:M) request for a preliminary injunction order aiming to block Penney from selling the collection of bedding, cookware, and other items labeled JCP Everyday while a larger court battle between the two big retailers over a partnership with the home maven is still pending.

Penney started to sell the JCP Everyday branded goods online and in its stores earlier this month.

Macy's, based in Cincinnati, had argued that the JCP Everyday products violate its long-standing exclusive contract with Martha Stewart Omnimedia (UNKNOWN:MSO.DL) in a broad array of products that include bedding and cookware.

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