Thread SCROTUS 9, NFL 0

Sarcasmo

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Big antitrust decision today from the Supreme Court, which rejected the National Football League’s claim that it has across-the-board immunity to antitrust law when its teams join in a commercial activity, clearing the way for trial of a lawsuit against the joint marketing of the right to use the teams’ logos and trademarks on consumer goods. Reebok has enjoyed exclusive rights to NFL teams' competing merchandise for some years, which has pissed off a number of its competitors and fans alike as prices have skyrocketed.

http://www.supremecourt.gov/opinions/09pdf/08-661.pdf

http://www.scotuswiki.com/index.php?title=American_Needle_Inc._v._NFL

Although major league baseball has been exempt from the antitrust laws since 1922, under a Supreme Court decision that year, the other pro leagues have not shared that immunity, and Monday’s ruling in the NFL case re-opened them to court challenge on at least some of their collective commercial efforts. The Court, however, sought to ease the anxiety that its ruling might create, saying “Football teams that need to cooperate are not trapped by antitrust law.” In an opinion by Justice John Paul Stevens, the Court went on to say that pro teams “share an interest in making the entire league successful and profitable,” and in pursuing that they may need to make “a host of collective decisions” that would be beyond antitrust challenge. The particular activity at issue, though, is “concerted activity” of the kind that is subject to challenge under the Sherman Act’s Section 1, the Court concluded.

The ruling was at least a temporary victory for a modest-sized company in Buffalo Grove, Ill. — American Needle, Inc., a maker of sports hats, uniforms and other apparel. It formerly was one of the consumer goods makers whose products were allowed to carry NFL trademarks and identifiers. But, in 2001, it was shut out, when the NFL’s 32 teams decided to solicit bids for an exclusive license to use those marks on headgear, and Reebok International Ltd., won the bidding contest, and got an exclusive license. Now, American Needle, whose claim was thrown out by the Seventh Circuit Court, now gets a chance to try to prove that the joint marketing was an illegal “restraint of trade.”
 

plot

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i see nothing wrong with having exclusive contracts for your own product. you created and developed it, why should some random t-shirt manufacturer be able to profit from you, your work, and your marketing efforts?
 

Sarcasmo

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i see nothing wrong with having exclusive contracts for your own product. you created and developed it, why should some random t-shirt manufacturer be able to profit from you, your work, and your marketing efforts?
Is that your stance before or after reading the opinion which I linked above?
 

Sarcasmo

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Seventh Circuit Court Ruling

The National Football League’s owners had won a major exemption from Sherman Act liability in the Seventh Circuit Court for themselves and for the owners in other pro leagues. They won a new right to agree among themselves that only a single outlet could sell hats, sweatshirts and other gear bearing the teams identifying logos and names. But the bigger part of the victory was that the Circuit Court made a significant leap in the reasoning behind that exemption. It ruled that, if a sports league seeks to promote its “brand” or its “product,” it must do so, as a matter of economic reality, through a joint venture, with no one competing with anyone else.

By itself, that was no small thing, in dollars and cents. Fan loyalty often expresses itself in the purchasing and wearing of identifying team gear; President Obama, for example, is so devoted to his hometown Chicago White Sox that he actually wore his Sox cap as he threw the first pitch for another baseball team’s opening game. That was commonly taken to be a sacrilege.

How much further beyond trademark licensing this exemption might have gone, no one could be quite sure. The players’ unions, in their expressed fear of a “Trojan horse,” speculated that the leagues would next argue that “promoting” the game also meant a joint, anti-competitive deal on players’ salaries and selection. And the coaches, in turn, worried about an anti-competitive approach to hiring and paying the on-the-field managers. And so on.

Supreme Court Ruling

The Supreme Court, ruling unanimously in American Needle v. NFL (08-661), put at least a temporary end to the speculation — at least to this extent: a claim that joint action is the only way to promote the “brand” of “NFL football” was simply but firmly rejected. Justice John Paul Stevens wrote that “defining the product as ‘NFL football’ puts the cart before the horse. Of course, the NFL produces NFL football, but that does not mean that cooperation amongst NFL teams is immune from [Sherman Act] scrutiny. Members of any cartel could insist that their cooperation is necessary to produce the ‘cartel product’ and compete with other products.”

If promoting pro football with the consuming public is the economic goal, “there would be nothing to prevent each of the teams from making its own market decisions relating to purchases of apparel and headwear, to the sale of such items, and to the granting of licenses to use its trademarks,” Stevens said. “Competitors,” he added, quoting colleague Justice Sonia Sotomayor when she was a judge on the Second Circuit Court, ” ‘cannot simply get around’ antitrust liability by acting ‘through a third-party intermediary or ‘joint venture.’ ”

The concluding part of the opinion represented an attempt to narrow the scope of the ruling, suggesting that the NFL and other pro leagues may well be entitled to quite broad antitrust immunity for such joint efforts as producing and scheduling games, taking steps to maintain “a competitive balance” between teams, and acting to ensure that the sport makes money. The actual legality of any joint practice, the Court made clear, was not being decided in this case — including the specific tactic of joint marketing of the right to use team trademarks. Each “collective decision” a league chooses to make, the opinion concluded, is to be judged by an antitrust “rule of reason” — a flexible standard that is keyed to particular facts and circumstances.

The trademark licensing case now returns to the Seventh Circuit, and very likely back to District Court, for a trial on whether that scheme is, in fact, an “unreasonable restraint of trade” in the way that it actually operates. The outcome was not foreordained by Monday’s ruling.

While the American Needle case always had the potential to produce a significant new statement from the Court on the Sherman Act’s application to commercial “joint ventures” in general, in the end it did not do so. Much of Justice Stevens’ opinion is simply a reiteration of past rulings on such collective activity, and, indeed, did not mark any deviation from the main precedent on the subject, the Court’s 1984 decision in Copperweld Corp. v. Independence Tube Corp. Stevens was an entirely faithful follower of that decision — even though he had dissented when it was issued.
 
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Sarcasmo

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is the NFL, along with its 32 teams, a “single entity” and therefore immune to the Sherman Antitrust Act when they act jointly in a business effort? But Justice after Justice insisted strenuously that that is not really the issue
The NFL is 32 separate, competitive businesses. Thus when they make a concerted effort to stifle competition it is in violation of antitrust statutes.

The implications of this ruling are pretty far reaching. For example, VISA and Mastercard are merely confederations of banks. This would likely apply to them, too.
 
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fly

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I'm glad this crap is wasting the time of our highest court.
I dunno, antitrust suits can be pretty important dood.
The NFL is 32 separate, competitive businesses. Thus when they make a concerted effort to stifle competition it is in violation of antitrust statutes.

The implications of this ruling are pretty far reaching. For example, VISA and Mastercard are merely confederations of banks. This would likely apply to them, too.
But they don't compete. If I have a coffee shop in Tampa, am I competing against yours in Dallas? Probably not. Now add in the fact that our coffee shops share profits. Now are we competing with each other? I can't see how.
 

Sarcasmo

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But they don't compete. If I have a coffee shop in Tampa, am I competing against yours in Dallas? Probably not. Now add in the fact that our coffee shops share profits. Now are we competing with each other? I can't see how.
NFL teams don't compete?

Competition literally perpetuates their existence. They compete for wins, players, coaches, merchandising money, ticket sales, everything. Pro sports teams compete on every level. The more zealously they compete, the more successful they are.
 

fly

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NFL teams don't compete?

Competition literally perpetuates their existence. They compete for wins, players, coaches, merchandising money, ticket sales, everything. Pro sports teams compete on every level. The more zealously they compete, the more successful they are.
I disagree. Oh, and your mother.