Penney and Martha Stewart have argued that since the Macy's contract does not specify that the stores have to be stand-alone, the mini-shops within Penney aren't barred by the exclusivity agreement.

WSJ: Trial over Martha Stewart brand resumes

Macy's sued Martha Stewart Living, arguing that the company breached its long-standing contract when it signed a deal with Penney in December 2011 to open Martha Stewart mini-shops, planned for this spring.

WSJ: Trial over Martha Stewart brand resumes