Executives at JC Penney have been trying to rebrand themselves to appeal to the lifestyle of the modern day consumer. Their logo and approach to the store has been to simplify everything. However the national chain may have just gotten into a very difficult situation.

Hudson + Broad Inc., a lighting design and branding firm, is suing JC Penney for $40 million over the company’s use of their new Fair and Square icon. Hudson + Broad Inc. claims that JC Penney breached their contract and misappropriated trade secrets.

Hudson + Brand Inc. claim that they originally developed and made the large square LED light fixtures now seen at the front of JC Penney’s stores. According to the complaint, JC Penney hired the small New York-based company to design something that would resemble their new logo. Hudson + Brand made two color changing fixtures for JC Penney. One was placed at the headquarters and the other was installed at the local store in Manhattan Mall.

H+B designed the perfect meld of medium and message – the LED Illuminated Square with a remote color controller. Composed of two vertical rectangular columns seamlessly joined to two horizontal columns, the Square represented an elegant portal into a new era of transparency,” as stated in the complaint filed to the United States District Court.

JC Penney Corporate then ordered 1,800 fixtures to be installed in over 700 stores nationally. However, Hudson + Brand Inc. claims that during their planning process, JC Penney broke their exclusive contract and had the units manufactured elsewhere.

“Demanding to be treated the way J.C. Penney would like to be treated – fair and square – and offended to have been made to jump through hoops, H+B brings this action, asserting claims of misappropriation of trade secrets, unjust enrichment, and breach of contract,” as stated in the complaint.

Hudson + Brand Inc. wants $20 million in compensatory damages and $20 million in punitive damages.

Michael Boulos who studies law says that Hudson and Brand Inc.’s challenge will lie in trying to prove punitive damages.

“Compensatory damages is just what they were hurt for, but punitive damages are up to the discretion of the judge. It’s basically a wrong-doing,” Boulos said. ” H+P wants to send a message out to the public of a wrong-doing.”

Boulos says the judge will look at how JC Penney is a big company and see if there was a breach in the contract, how it would effect the small company. If the breach hurts them significantly, Hudson and Brand Inc. may be compensated more.

Boulos says to expect a strong response by JC Penney in the future, despite the fact officials are declining to comment on the pending litigation currently.

“They are going to hire the best damn attorney out there to find a way to win. They are going to throw out every single defense out there,” Boulos says.