American Needle: Supreme Court Finds the NFL's Intellectual Property Licensing to Involve "Concerted Action" Subject to the Antitrust Laws

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SUMMARY OF DECISION

In American Needle, Inc. v. National Football League, the Supreme Court held that that the NFL’s conduct relating to the licensing of the teams’ trademarks and other intellectual property constitutes concerted action of the sort that is within the scope of Section 1 of the Sherman Act rather than unilateral conduct to which Section 1 would not apply. The Court, in an opinion by Justice Stevens, unanimously reversed the decision of the Seventh Circuit, which had found that the NFL and its teams are a single entity incapable of conspiring within the meaning of Section 1 with respect to the licensing of their intellectual property.

In finding that the NFL’s conduct came within the scope of Section 1, however, the Court also explained that the NFL’s conduct should not be condemned outright under Section 1, but instead analyzed under the “flexible” rule of reason. The Court identified several justifications that might allow the court on remand to find that there was no violation of Section 1, perhaps even in the “twinkling of an eye” without the need for detailed analysis.

Although the Court’s reasoning may spark debate about the circumstances under which Section 1 applies to the decision-making of other joint ventures, the Court was undoubtedly influenced by the somewhat unusual factual context of the case, where it perceived an agreement among dozens of separately owned football teams competing both on and off the playing field, including with respect to the intellectual property licensing at issue in the case.

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