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.
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.”