JCPenney Hit With $40 Million Lawsuit Claiming They Stole Light-Up Logos

While it seemed the little rebranding engine that could, JCPenney, was chugging along at an admirable pace, a lawsuit against the retail chain could make a bit of a kink in the tracks. A lighting design and branding firm is suing JCPenney for $40 million over their new logo.

The Chicago Tribune says Hudson + Broad Inc. is suing over JCPenney’s Fair and Square icon, claiming breach of contract and misappropriation of trade secrets. They filed the complaint with the U.S. District Court in Manhattan.

The issue arises over the large, square fixtures made with Plexiglas and LED lights that are sprinkled throughout JCPenney’s store to mimic their new logo, as part of the company’s attempt to update heir store interiors.

Hudson + Broad, a small New York-based company, says it was the one who first developed and created the first of those large displays in a deal struck in 2011, but that JCPenney then farmed out production to other manufacturers.

The design company says one large logo that could change colors on command was installed at the JCPenney Manhattan Mall location, with another at corporate headquarters in Texas. Hudson + Broad claims JCPenney followed that up by asking for 1,800 unites to be installed in over 700 stores. But while the design company was planning that move, JCPenney decided to source the units elsewhere.

Hudston + Broad says it was “shocked beyond belief” and told JCPenney the logos were proprietary. It claims JCPenney then stopped all communication. The design company is seeking $20 million in compensatory damages and $20 million in punitive damages.

Rebranding rut: J.C. Penney sued for $40 million over new icon [Chicago Tribune]

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  1. MaxH42 thinks RecordStoreToughGuy got a raw deal says:

    But…but…they found someone else who would do it for 40% less!

  2. Dave on bass says:

    OK, so H+B isn’t suing over the logo’s use (I’m assuming they weren’t the logo designers), but the design of the light fixture itself which was built to mimic the logo?

    There’s a design situation I admittedly never thought of, as a freelance designer myself – at its most basic, when a logo is designed for someone they are typically the rights assignee and that’s that – I guess I never thought about somebody’s building a physical representation of said logo being defensible in an IP-rights kind of way.

    If H+B were the designers of the logo image itself, then it may be a different story, but as it reads it sounds closer to a simple breach of contract, if one existed, for the lights’ construction and installation.

    • MPD01605 says:

      I’m leaning toward breach of contract as well. It’s JCP’s logo, they can do what they want. Now if H+B had proprietary software or something and JCP took it and ran, that could be an IP issue. This is a confusing lawsuit.

    • cash_da_pibble says:

      It seems not the LOGO, but the design of the fixture that incorporates the logo. Awesome lighting fixtures just don’t HAPPEN. They have to be designed by someone.

      Also…. huge NONO to buying the first few works, placing an order for THOUSANDS more-
      then giving a different manufacturer the light and asking them to backwards-engineer it for cheaper.

      THAT is fucked up.

      • TheCorporateGeek Says Common Sense Is The Key says:

        How is that fucked up? It’s the way capitalism works….

        • LadySiren is murdering her kids with HFCS and processed cheese says:

          IANAL but I believe it maybe falls under theft of intellectual property? Unless the design firm specifically conveyed ownership of the design to JCP, JCP does not have the right to take said design and farm it out to someone who can manufacturer the item more cheaply than the original designer. Also, derivative work laws – maybe they come into play here, as well?

          If one of our resident legal beagles would weigh in here, it’d be helpful.

          • Jerry Vandesic says:

            From an IP point of view, H+B would likely need a patent on their design in order to prevent others from copying it. This requires a fairly large investment before you have the protection of a patent. Copyright and/or trademark protection are not likely to apply in this case.

            • Jerry Vandesic says:

              It appears that H+B is suing for theft of their trade secrets. Trade secret cases are very dependent on the facts about who knew what and how H+B protected their secrets. If JCP simply asked another supplier to copy the design they are probably OK; on the other hand if JCP provided secret details about H+B’s design and asked another company to implement those secret details, they could be in trouble.

  3. YouDidWhatNow? says:

    So…Hudston is the guy then?

    Also, I would also like some unites to be installed. Is the minimum order 1,800 unites? I really only need a couple.

  4. Mr. Spy says:

    “Hudson + Broad, a small New York-based company, says it was the one who first developed and created the first of those large displays in a deal struck in 2011, but that JCPenney then farmed out production to other manufacturers.”

    So…. When you buy your logo for millions of dollars from some production company…. Don’t you BUY the logo? And once you own the logo…. Shouldn’t you be able to have it produced where ever the heck you want?

    Nothing about a sign that can change colors sounds anything like “misappropriation of trade secrets”. Every bit of that technology is readily available to every company… in the world.

    Now, what I want to hear about is this breach of contract stuff. That’s the only thing in my mind that makes sense. I want to see how they breached this contract.

    The devil is in the details. Did they buy all the rights to the sign design? Did their contract say that they would be the sole producer of that design? Did they have a contract in place to make X number of them? Does the contract let JCPenny off the hook for something we don’t know about? Is this a publicity stunt because JCPenny just decided to use someone else and they are mad?

    • SavijMuhdrox says:

      I’m leaning towards the fact that this small company does this for a living (design logos), and so they probably know the contract terms inside and out; so if they are going thru all the trouble of suing JCPenny, they are probably in the rights.

      Its all speculation, but i would think this is the last we hear of this. JCPenny would be stupid to drag this out, right or wrong… though i would be interested to know the ultimate outcome.. but that why we have Consumerist.. yaaay

  5. TheMansfieldMauler says:

    This kind of thing comes up all the time in the internet/website industry, and the bottom line is you have to carefully read all contracts and make sure of what you’re getting. I’ve seen clients many times get cease & desist letters from the designer/developer they just left because, although they paid for the design, logo, website, etc. the designer/developer still owns the designs.

    I bet there’s some obscurely phrased clause in the contract that some JCP corporate lawyer missed because he didn’t understand the scope of the branding process.

  6. Blueskylaw says:

    Sounds like mandatory binding arbitration would come in handy here.

  7. osiris73 says:

    Having worked at a couple of companies that design and build items, this is a fairly common occurrence. It all depends on the agreement you have with the customer. Sometimes, we agree to design the item at a much lower price that we normally would if we ALSO get the contract to build production quantities. If we’re just designing and prototyping it, and you get it built elsewhere, it costs you more. The customer can promise you all day long that you will get the business after the design phase, but if they don’t put it in writing… it’s iffy as to whether or not it was a binding verbal contract.

  8. Cat says:

    If they copied the design of the sign, yes, they have a case.

    Yes, I work for a sign manufacturer. You’ve seen my work in Vegas.

    • NotEd says:

      That’s what I thought. (Design of the sign-wise, not that your work appears in Vegas. Kudos on a good gig, though.)
      Thanks for clarifying.

    • huadpe says:

      I’m curious, since I work in IP, do you guys protect the signs with just copyright, or do you file for design patents as well?

    • YouDidWhatNow? says:

      Really? Post some pics. But in order for me to recognize them, you’d have to take the photos from the point of view of laying flat on your back on the sidewalk…and with a really blurry lens filter.

  9. Worstdaysinceyesterday says:

    I wonder if JCP came to them and said, can you build this?” and handed over a cocktail napkin draft. Or did JCP asked them what they could create as an impactful design which met xyz criteria? In the former, it would seem to be JCP design, with H&B manufacturing. H&B might not have as strong a case in that instance. But if it were the latter, I would say they did design it and JCP might be on the hook. Hard to say…

  10. poolejc says:

    All we need is a new way for people to screw up the word their.
    Grammar posse was here, Word.

  11. Andreth says:

    Read the headline too quick and thought that it said “Light-Up Legos”. You can imagine how disappointed I am now.

  12. Warren - aka The Piddler on the Roof says:

    A $40 million dollar lawsuit over a logo that looks like it was designed by a six-year-old?

    Seems legit.

  13. Press1forDialTone says:

    JCP should settle immediately as long as the settlement includes their continued use
    of the items in question. $40 million is a drop in the bucket to JCP and if they don’t
    settle and the media circus closes in, it will dramatically jeopardize their re-branding
    effort. This is a no-brainer from JCP’s perspective. The little company that made the
    first lighted logo just didn’t have the ability to outfit 700 stores and JCP went elsewhere.
    I also find it hard, very hard, to believe that JCP didn’t contract for complete rights to
    the resulting logos that were placed in Texas and New York. To not be able to do with
    them as they please would just be stupid.

  14. KFW says:

    “1800 unites” or “1800 units”? Once again, no editorial skills.

  15. VashTS says:

    Gosh I hate lawyers and US laws. Taxes to much paperwork, FREE crappy insurance too much paperwork….the big question is what cannot be sued over?

  16. CommonSense(ಠ_ಠ) says:

    LOL, sorry, but when you work for a company you do not get the rights for things they paid for.
    This company has a lot to learn about copyright laws and what customers pay for.