Steven G. Bradbury, Dechert LLP*
In a unanimous opinion penned by Justice Stevens, the Supreme Court has held that the National Football League must defend its collective trademark licensing arrangements from antitrust challenge under section 1 of the Sherman Act. American Needle, Inc. v. National Football League, No. 08-661 (U.S. decided May 24, 2010). The opinion represents the swan song in the area of antitrust law for Justice Stevens, who has authored some of the Court’s most significant antitrust rulings in recent decades, and it has the potential to refocus antitrust scrutiny of joint ventures beyond the specific context of professional sports leagues.
Because the 32 teams of the NFL are separate economic actors and could potentially compete with each other for the licensing of their separate trademarks, the Court reasoned, an agreement among the teams to license their trademarks collectively is concerted action that is subject to scrutiny as a restraint of trade under section 1. The Court stressed that whether a particular agreement represents concerted action for purposes of the Sherman Act turns on function, not form—it requires consideration of the economic relationship among the actors, including whether they represent separate decision makers and have the potential to compete with one another in the specific area that is the subject of the agreement in question. Continue reading