Macy's parts with 'zombies' to settle suit

Posted at 3:01 PM, Feb 29, 2016
and last updated 2016-02-29 15:16:22-05

CINCINNATI - Macy’s Inc. has settled a five-year-old trademark dispute by giving up rights to Jordan Marsh and five other dormant department store names.

The settlement allows a California company to build a “virtual mall” with retail banners that were once owned Macy’s and its predecessor companies.

“In addition to the creation of our virtual mall, we also plan to move forward rebuilding the stores in their local markets now that our discussions with investors can resume. Our vision is to bring back the shopping experiences the customers and loyal employees once loved,” said Ellia Kassoff, CEO of Strategic Marks LLC, in a press release.

Macy’s confirmed the settlement but declined further comment.

The Newport Beach-based company has a stable of brands whose trademarks were relinquished by their prior owners. Hydrox cookies and Astro Pop candy are among its better-known names.

In addition to Robinsons-May, the settlement adds five regional department-store brands to Strategic Marks’ portfolio: Jordan Marsh, I. Magnin, Bamberger’s, Foley’s and Bullock’s.

“Consumers noted the current shopping experience is quite drab, as there is no localized marketing or buying for the regional stores anymore,” Kassoff said. “People want to go back to the days when shopping was a real experience at their local department store. They really miss that.”

RELATED: Macy's sues to protect department store names

Macy’s sued Strategic Marks in 2011 after Kassoff started selling T-shirts with eight department store logos, including Filene’s, Abraham & Straus and Bullock’s. Kassoff argued that Macy’s relinquished rights to the names by not using them after it converted hundreds of stores to the Macy’s name in 2006.

In 2015, Kassoff added 12 new banners, including Marshall Field’s, Lazarus and Kaufmann’s, to his T-shirt offerings at Macy’s argued that it was still using the names in its online Heritage Shop, which offers T-shirts and shopping bags with its old department store names.

The settlement happened just a few weeks after Macy’s won a partial summary judgment that affirmed its right to control eight banners: Marshall Field's, I. Magnin, Burdines, Kaufmann's, Lazarus, Meier & Frank, Rich's and Strawbridge's.

“Simply because a store has ceased operations does not mean that its proprietor or owner does not maintain a valid interest in the registered trademark of the business,” wrote U.S. District Judge Edward Chen of San Francisco. “A trademark can still exist and be owned even after a store closes.”

In his Feb. 1 ruling, Judge Chen described Strategic Marks as "a business that revives 'zombie' brands" and rejected several of its legal arguments against Macy's. But that didn't keep Macy's from transferring rights to several banners at a court-ordered settlement conference on Feb. 22.

Here’s a closer look at the names Macy’s relinquished in the settlement, based on histories filed with the court by Macy’s:

  • Jordan Marsh, a prominent New England department store initially located in Boston was founded by Benjamin L. Marsh and Eben Jordan in approximately 1851.
  • Bullock’s, a prominent West Coast department store initially located in Los Angeles, was founded by John G . Bullock in 1907.
  • Robinsons-May stores from the West Coast trace their history back to the opening of the J.W. Robinson Company in 1881. The Los Angeles-based store catered to an upscale clientele and quickly branched out to multiple locations.
  • Foley’s was founded by brothers Pat and James Foley in Houston in 1900 and grew to be, at one point, the largest volume department store in the state.
  • I. Magnin was initially established by Mary Ann Magnin in San Francisco in 1876 and quickly grew into a well-known, upscale department store.
  • Bamberger's was a Neward, N.J.-based chain founded by Louis Bamberger in 1893.It converted to the Macy’s name in 1986.