Intellectual Property Law

A Trademark/Antitrust Intersection

By Mike Madison

Major League Baseball has signed a deal with Topps, the baseball card company now controlled by Michael Eisner, that will give Topps exclusive rights to produce trading cards using images of major league ballplayers and marks of MLB teams.

The deal may be questionable under antitrust law. Not unlawful, but questionable, given the American Needle case, now headed to the Supreme Court. The argument, a la American Needle, would go something like this: A group of competitors (the major league teams) are colluding to suppress competition in the sports memorbilia market. If the players really are competitors for relevant purposes, then the antitrust case against them is compelling, if not necessarily an automatic winner.

But.

Even if the deal doesn’t pass muster under antitrust law, is it justifiable — we might say, is it in the interest of consumers — from a trademark law perspective? Antitrust analysis would take account of IP interests here from the producer standpoint; as the American Needle opinions reflect, from an antitrust perspective the question would be whether market discipline is needed to limit the monopoly power of an IP rights holder. My question is different; trademark law asks about non-price aspects of consumer interest. That’s the trademark-based rationale that seems to be implicit in Eisner’s spin:

?This is redirecting the entire category toward kids,? said Eisner, who acquired the company in 2007. ?Topps has been making cards for 60 years, the last 30 in a nonexclusive world that has caused confusion to the kid who walks into a Wal-Mart or a hobby store. It?s also been difficult to promote cards as unique and original.?

Eisner doesn’t explain “confusion as to what,” but what he seems to be saying is that the deal is needed not to avoid confusion in the present market, in which Topps competes with Upper Deck and which, I take it, includes healthy participation by (non-confused) adult collectors. Instead, the deal is needed to avoid some kind of future confusion in a potential market — which is, in a Back to the Future sort of way, a traditional market.

Suppose Topps and MLB could spin a factual tale to back up Eisner; there might be a pro-consumer argument from a trademark perspective that balances what American Needle might argue (and presumably will argue, in its own case) to be an anti-consumer argument from an antitrust perspective. Assume, in other words, that the two legal worlds collide. What result?

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Full post as published by Madisonian.net on August 07, 2009 (boomark / email).