IP Law Daily, TRADEMARK—S.D.N.Y.: Declaratory judgment action seeking to sell unlicensed NFL merchandise dismissed, (Oct 21, 2025)

By Linda O’Brien, J.D., LL.M.

Judicial economy would not be served by a court entertaining a declaratory judgement action where the plaintiff had an affirmative defense to a trademark infringement claim.

In a declaratory judgment action by a litigation attorney against the licensing entity for the National Football League seeking to sell unlicensed NFL merchandise without authorization or risk of suit, although the attorney met his burden to show that a justiciable case or controversy existed, the federal district court in New York City declined to exercise its discretion to hear the case. Additionally, the court declined to impose costs on the attorney for dismissing his original complaint and filing a new action as well as imposing sanctions on the licensing entity for bringing its motion for costs. Thus, the licensing entity’s motion to dismiss the complaint was granted (Bank v. NFL Properties LLC, No. 1:25-cv-03981-CM (S.D.N.Y. Oct. 20, 2025)).

NFL Properties LLC (NFLP) is the merchandising and licensing entity for the National Football League (NFL), an unincorporated association whose members are 32 U.S.-based professional football clubs. NFLP is responsible for the licensing of the names, logos, color combinations, uniform trade dress, slogans, and other identifying marks of the NFL and its member clubs. In November 2024, Todd C. Banks, a New York litigation attorney, sent a letter to the NFL, expressing his view that the sale of unlicensed NFL merchandise bearing registered trademarks would not constitute either trademark infringement or dilution because NFL trademarks are functional under trademark law. NFLP responded by stating its view that sales of unlicensed NFL merchandise would constitute trademark infringement and dilution and expressly reserved the right to sue a seller of such merchandise.

Wishing to sell NFL merchandise without approval of the NFL and without risk of being sued under the federal trademark statute, Bank filed his first complaint on his own behalf against NFLP, seeking a declaratory judgment that his sale of unlicensed NFL merchandise would not violate the Lanham Act. NFLP moved for dismissal for lack of standing. In response, Bank amended his complaint and NFLP again moved to dismiss on the ground that the amended complaint failed to plead a justiciable controversy. Before the court was able to rule on the motion, Bank voluntarily dismissed his complaint.

After dismissing the complaint, Bank took steps to prepare his unauthorized merchandise for sale. He purchased 33 embroidered patches bearing NFL trademarks, purchased tee shirts affixed with an embroidered patch, obtained a URL and domain name to sell tee shirts online, took photographs of the tee shirts, and posted photos of the tee shirts on the website. In May 2025, Bank filed another complaint against NFLP, seeking the same declaratory relief as the first complaint. Before the court was NFLP’s motion to dismiss the complaint and for costs and Bank’s motion for sanctions.

Justiciable controversy. Bank’s actions taken together demonstrated more than just a vague or general desire to use the NFL trademarks, the court found. Specifically, Banks designed, purchased and affixed embroidered patches to the tee shirts and created a website for the express purpose of selling those items. He created other content for the website, including multiple webpages titled “Home,” “Terms,” “Privacy,” “Contact,” and “Cart/Checkout” and took all preliminary steps to make the website operative. Those actions showed a definite intent and apparent ability to commence the use of NFL trademarks in the U.S. market. Bank did not pretend that he had any intention to create a profitable merchandising business as, at this stage of the litigation, Bank was required only to show a “definite intent and apparent ability to commerce use of the marks on the product.” There was justiciable controversy even though it was created for the sole purpose of allowing Bank to engage in annoyance litigation, the court stated.

However, the court declined to exercise its discretion to hear the case under the Declaratory Judgment Act. Bank argued that he was seeking a blanket declaration that he would not be liable under the Lanham Act if he sold tee shirts bearing NFL trademarks as the marks were functional. Functionality is an affirmative defense to an allegation of trademark infringement and courts routinely find the use of the Declaratory Judgment Act to assert an anticipatory defense to be improper because it “deprives the plaintiff of his traditional choice of forum and timing, and it provokes a disorderly race to the courthouse.” If Bank really wanted to test the functionality of the NFL trademarks, then he should activate his website and offer his tee shirts for sale. If he did that, the NFLP will undoubtedly sue him for trademark infringement and he could assert his affirmative defense. By bringing this action for a declaratory judgment, Bank forced NFLP to spend money needlessly, while wasting the court’s time. Judicial economy is not served by entertaining a lawsuit seeking a declaration that Bank had a defense to a trademark infringement claim, the court explained.

Costs. NFLP moved for costs on the grounds that Bank acted improperly by voluntarily dismissing his complaint and refiling it as a new action in order to evade the timing and page limitations on filing an opposition to its motion to dismiss. While there was some evidence that Bank dismissed his compliant in order to forum shop, his contention that he had no choice but to discontinue and refile was arguably correct. Bank’s assertion that he could not rely on facts that did not exist at the time of the original lawsuit but were subsequently created was not frivolous. Since the court lacked subject matter jurisdiction over the original complaint, it was reasonable for Bank to believe that seeking leave to amend the complaint would have been futile. Thus, the court declined to impose costs on Bank for dismissing the original complaint and filing a new action.

Sanctions. Bank’s motion to impose sanctions on NFLP for filing its motion for costs was denied. Bank did not identify any specific conduct that demonstrated NFLP’s motion for costs was frivolous or that its legal arguments were objectively unreasonable. On the contrary, it appeared that NFLP moved for costs based on a good faith belief that Bank should have amended his complaint rather than file it as a new action. This belief was objectively reasonable, the court concluded.

The Case is No. 1:25-cv-03981-CM.

Judge: McMahon, C.

Attorneys: Todd C. Bank (Law Office of Todd C. Bank) for Todd C. Bank. Craig Brian Whitney (Proskauer Rose LLP) for NFL Properties LLC.

Companies: NFL Properties LLC

Cases: Trademark NewYorkNews