Corporate & Securities Law

FTC and DOJ Urge Reversal in American Needle v. NFL

By Matthew S. Wild

As noted in the June 29, 2009 Post, the Supreme Court granted certiorari to review the Seventh Circuit’s decision in American Needle v. Nat’l Football League.  As explained in the September 4, 2008 Post, American Needle applied the Copperweld doctrine to a sports league’s joint licensing scheme for the first time. In so doing, it affirmed summary judgment in favor of the NFL, its teams and Reebok in an antitrust challenge to an exclusive license of team names and logos to Reebok for use on headwear.  (The decision is linked to the September 4 Post).  As explained in Wild, et al., ?Private Equity Groups Under Common Legal Control Constitute a Single Enterprise Under the Antitrust Laws,? 3 NYU Journal of Law and Business 231, 237 and n.31 (attached under articles above), that doctrine treats two or more firms that are under common ownership or have a unity of interest in a common course of action as a single firm incapable of conspiring or otherwise acting collectively under the antitrust laws.

In their amici curiae brief, the government urges reversal.  It argues that the Seventh Circuit extended the Copperweld doctrine in a manner inconsistent with prior precedent — e.g., Texaco Inc. v. Dagher, 547 U.S. 1 (2006), in which the Supreme Court applied the rule of reason to a price-setting joint venture and NCAA v. Board of Regents, 468 U.S. 85 (1984), in which the Supreme Court applied a “quick look” to a NCAA restriction on each individual college’s right to broadcast their football games.  While the government conceded that the league should be entitled to Copperweld immunity under circumstances in which the teams need to cooperate such as to produce games, the licensing of NFL team logos is not one of them.  Indeed, the government observed that the NFL joint licensing scheme was similar to the type of scheme under review in Broadcast Music, Inc. v. CBS, 441 U.S. 1 (1979).  In BMI, the Supreme Court applied the rule of reason to a joint venture in which composers created a clearinghouse to sell a blanket license to works by more than one of them.   The American Antitrust Institute and Consumer Federation of America also filed a brief as amici curiae urging reversal.  Their brief and the government’s brief are linked below.  DOJ and FTC Brief;  AAI Brief

Full post as published by Antitrust Commentary on September 30, 2009 (boomark / email).