Department of Justice and the Federal Trade Commission file amicus brief with the Supreme Court in American Needle v. NFL

On 25 September 2009 the U.S. Department of Justice and the Federal Trade Commission filed with the U.S. Supreme Court an amicus brief supporting the petitioner in American Needle Inc. v. National Football League et al. a case concerning whether the National Football League (“NFL”) teams and the league acted jointly or as a single entity in licensing their trademarks and logos exclusively to a headwear manufacturer (see Newsletter 4/2009, p. 4 for background).

The Brief argues that whether a joint venture engages in concerted action or acts as a single entity depends on the function of the venture concerned. Accordingly, applied to the present case, only if

1)    the teams and the league are effectively merged in the relevant aspect of their operation, thereby eliminating actual and potential competition among them in that respect, and,

2)    when the restraint does not significantly affect rivalry among the teams and the league outside such merged operations,

would treatment as a single entity be appropriate.

According to the Brief, the Court of Appeals’ analysis, though appropriately focusing on the aspect of licensing, was flawed in several respects. Among other things, the Brief argues that the Court

–       failed to distinguish between the different stages of the licensing decisions,

–       gave the purpose of promoting NFL football an excessive role in assessing the licensing activities,

–       erroneously considered that the teams would need to cooperate in licensing in order to produce games, and

–       incorrectly considered that the absence of competition among the teams was an indication of its infeasibility.

Moreover, the Brief warns that the broad concept of single entity advocated by the respondents, if accepted, could harm antitrust enforcement beyond this dispute and the realm of sports. The Brief consequently argues that the Court of Appeals decision should be vacated and the case be remanded for further proceedings. [Juha Vesala]