Supreme Court to Hear NFL Antitrust Case

The Supreme Court is taking an appeal from a manufacturer that used to make NFL headwear, that is, until it was left standing in the cold after Reebok scored an exclusive deal with the NFL in 2001. American Needle, the former maker, has since claimed in court that the exclusive licensing agreement violates antitrust laws. Now, the NFL antitrust case has come to the nation's highest court, and the case has significant implications for everyone from sports leagues to consumers alike.

As described by a federal appeals court opinion in the case, American Needle's argument basically was that because each of the individual NFL teams separately owned their team logos and trademarks, their collective agreement to authorize a corporate entity known as "NFL Properties" to award the exclusive headwear license to Reebok was, in fact, a conspiracy to restrict other vendors' ability to obtain licenses for the teams' intellectual property.

The NFL defendants (the teams, and the corporate entities) successfully argued that they are immune from the antitrust laws at issue because the defendants function as a "single entity" when licensing the NFL teams' intellectual property. If the league was viewed by courts as 32 distinct business entities (the teams), antitrust implications would certainly be in play.

Not surprisingly, other sports leagues are keeping a close eye on this case because it could have implications far beyond just the licensing of teams' intellectual property. Other sports league decisions that have inspired litigation, such as those involving ownership and relocation, could also become more insulated from suit. Indeed, NFL spokesman Greg Aiello "said the league looked forward to explaining why the court should extend, on a national basis, favorable appeals court rulings on how antitrust laws apply 'to the unique structure of a sports league.'"

Additional Resources:

• Slate: Baseball's Con Game (www.slate.com)