Federal Antitrust Agencies Advise High Court to Vacate NFL Licensing Decision

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The federal antitrust agencies filed a joint amicus curiae brief in the U.S. Supreme Court, recommending that the Court vacate a decision of the U.S. Court of Appeals in Chicago (2008-2 Trade Cases ¶76,259), holding that the National Football League and its 32 members did not engage in an illegal antitrust conspiracy by granting an exclusive trademark license to apparel manufacturer Reebok International.

The appellate court had rejected a complaining apparel manufacturer's Sherman Act Section 1 claim on the ground that the league and teams were acting as a single entity when collectively licensing their intellectual property through a jointly-owned licensing affiliate.

The government initially had urged the Court to reject the petition for review. However, on June 29, 2009, the Court granted the petition, which asked:

(1) whether the league and the teams were a single entity exempt from rule of reason claims under Section 1 of the Sherman Act and

(2) whether the license agreement between the league and its members and Reebok International—under which the teams agreed to refrain from competing with each other in the licensing and sale of apparel and to refrain from granting licenses for a period of ten years—was subject to a rule of reason claim.

The American Antitrust Institute and the Consumer Federation of America also filed an amicus curiae brief urging the Court to reverse the Seventh Circuit’s ruling. The brief maintains that the appeals court radically expanded the Copperweld doctrine.

The petition is American Needle, Inc. v. National Football League, Dkt. 08-661.

Text of the amicus brief appears here at the Department of Justice website.