Breaking News: American Needle v NFL

Breaking News: The Supreme Court didn't deliver Bilski today but they did unanimously decide that American Needle's important IP and anti-trust lawsuit against the NFL can proceed (see decision here).

In brief, a 2001 agreement made between Reebok International and the National Football League (NFL) granted Reebok an exclusive licence for the rights to use the NFL's (i.e., all 32 NFL teams) IP (team trade marks, logos, etc) for baseball caps and other apparel. It therefore followed that American Needle and other merchandise manufacturer’s licences with the NFL were not renewed. Consumer prices for NFL team’s merchandise in turn increased. American Needle et al filed a complaint in 2004 alleging that this agreement was in violation of sections 1 and 2 of the Sherman Antitrust Act.The NFL (the biggest of the big sports businesses) asked the court to shield them from anti-trust laws which could have allowed the potential anti-competitive licensing of their intellectual property to continue affecting manufacturers like American Needle and consumers of NFL products (for further details see previous post here). The NFL's argument was that the NFL was one single entity, not a plurality of 32 individual teams, and so thus fell outside the Sherman Act's plurality requirement.

The Supreme Court held that the NFL's "alleged conduct related to licensing of IP constitutes concerted action that is not categorically beyond section 1's [of the Sherman Act's] coverage" and that the NFL does not constitute a single entity for the purposes of the Sherman Act. This decision overturned the lower court's decision which threw out American Needle's lawsuit at the summary judgment stage. Justice Stevens, giving the majority opinion, wrote:

"Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned."

The Supreme Court have remanded the case back to the lower court for re-consideration of its section 1 analysis.

This Kat will be back with a detailed update once she has time to digest all of the 20 pages of the decision. In the meantime see these articles in the Financial Times and the Wall Street Journal.