IP Law Daily, TRADEMARK—S.D.N.Y.: Counterclaims survive motion to dismiss in ‘JUSTICE’ trademark dispute, (Dec 4, 2025)

By Carolin Dennis, B.Sc., LL.B., LL.M.

The district court found the counterclaims of trademark infringement, false designation of origin, unfair competition, and dilution were sufficiently pled.

The U.S. District Court for the Southern District of New York denied a running apparel brand’s motion to dismiss trademark infringement, false designation of origin, unfair competition, and dilution counterclaims. The district court found that the trademark owner adequately pleaded the counterclaims (S.E. Satisfy v. Blues Tar Alliance LLC, No. 1:25-cv-04845-CM (S.D.N.Y. Dec. 3, 2025)).

Justice Brand Holdings LLC (JBH) owned valid and subsisting registrations for the trademark “JUSTICE.” JBH’s predecessor company first used the JUSTICE trademark on apparel for men, women, boys, and girls in the 1960s; over time the company extended its use of the mark to cover other products. S.E. SATISFY (Satisfy) is a French apparel company which sells running and outdoor clothing and related accessories around the world, including in the United States. At some point, Satisfy began using “Justice” as a trademark for portions of its product line. After receiving a cease-and-desist letter from Bluestar Alliance LLC (Bluestar) and JBH (collectively, defendants), Satisfy initiated an action under the Declaratory Judgment Act seeking a judgment declaring that Satisfy’s use of “Justice” does not infringe on JBH’s trademark rights in violation of the Lanham Act. The defendants filed their answer to Satisfy’s complaint denying many of the complaint’s allegations and asserted the affirmative defense of unclean hands. Additionally, JBH asserted counterclaims for trademark infringement under Section 32 of the Lanham Act, false designation of origin under Section 43(a) of the Lanham Act, trademark dilution under New York General Business Law § 360-1, and trademark infringement and unfair competition under New York common law. Satisfy moved to dismiss JBH’s counterclaims for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) on grounds that likelihood of confusion is implausible as a matter of law.

Lanham Act claims. The district court noted that Satisfy did not contest that JBH’s JUSTICE trademark is a valid mark entitled to protection but asked the district court to dismiss JBH’s counterclaims because likelihood of confusion is implausible as a matter of law. The district court found that considering only the facts alleged in JBH’s counterclaims, it cannot conclude that likelihood of confusion is implausible as a matter of law because while Satisfy may ultimately prevail, it presented issues of fact that cannot be disposed of on a motion to dismiss. Therefore, at this stage, JBH’s allegations that Satisfy sells activewear, including running apparel, bearing a mark identical to the one for which JBH holds a trademark, in the same geographic area as JBH, are sufficient. Thus, Satisfy's motion to dismiss JBH’s Lanham Act counterclaims was denied.

Common law trademark claims. The district court noted that JBH adequately alleged that Satisfy was aware of the “Justice” mark and notwithstanding that awareness, and in fact by reason of same, proceeded to use the “Justice” mark on its apparel in order to cause consumers to believe that its goods are approved by or otherwise affiliated with JBH and its JUSTICE trademark.

Satisfy agreed that trademark registration provides a constructive notice of a registrant’s claim of ownership of a mark for the goods noted in the registration certificate, but argued that its knowledge of the “JUSTICE” mark’s registration was insufficient to allege bad faith because a registration for night gowns, halter tops, dresses and knee highs certainly does not provide constructive notice of any potential or likely confusion with luxury performance running gear. However, the district court found that Satisfy’s argument wholly overlooked the other clothing items listed on the registration certificate, including jogging suits, shirts, t-shirts, tank tops, pants, shorts, boxer shorts, sweat pants, sweat shirts, and sweat suits, all of which could be used as running gear. Moreover, Satisfy’s contention that it did not intend to trade on the defendants’ good will, even if true, did not preclude a finding of bad faith. Accordingly, the district court denied Satisfy’s motion to dismiss JBH’s common law trademark claims.

Trademark dilution. The district court noted that to succeed on a trademark dilution claim under New York law, a plaintiff must show (1) that it possesses a strong mark, which has a distinctive quality or has acquired a secondary meaning and (2) a likelihood of dilution by either blurring or tarnishment. Satisfy did not challenge the distinctiveness of JBH’s JUSTICE mark but instead argued that JBH failed at the second step because it has not plausibly alleged a likelihood of dilution. The district court found that it was sufficient at this juncture that JBH has alleged that Satisfy is using the same distinctive mark and that there is competitive proximity between the parties' respective products, thereby raising the possibility that the mark will lose its ability to serve as a unique identifier of JBH’s product. Therefore, Satisfy’s motion to dismiss JBH’s counterclaim for dilution in violation of New York law was denied.

The Case is No. 1:25-cv-04845-CM.

Judge: McMahon, C.

Attorneys: Palak V. Patel (Jayaram PLLC) for S.E. Satisfy. John Paul Mixon (Dorsey & Whitney LLP) for BlueStar Alliance, LLC.

Companies: S.E. Satisfy; BlueStar Alliance, LLC

Cases: Trademark GCNNews NewYorkNews