Dang v. San Francisco Forty Niners - Consumers can challenge Reebok's exclusive NFL apparel deal based just on a market of garments bearing NFL team logos

by Sheppard Mullin Richter & Hampton LLP

On August 2, 2013, District Judge Edward J. Davila denied a motion to dismiss antitrust claims brought by consumers of NFL apparel against Reebok and the NFL in Dang v. San Francisco Forty Niners, Case No. 5:12-CV-5481 (N.D. Cal.). Plaintiff seeks to represent a class of NFL apparel purchasers who were allegedly overcharged as a result of an agreement that gave Reebok the exclusive right to make and sell NFL apparel. Defendants -- Rebook, the NFL, the NFL teams, and an NFL licensing entity -- argued that plaintiff lacked standing and failed to adequately plead a relevant market. Judge Davila denied defendants’ motion to dismiss. The Court held that NFL apparel and NFL apparel licenses could be relevant markets because the NFL logos may be what consumers really want, in which case non-NFL apparel would not be a reasonable substitute. The Court also held that Dang had sufficiently pleaded standing in both markets, because he was present and injured in the retail market, and his injury was inextricably intertwined with the licensing market. The decision has potentially broad implications for similar licensing agreements throughout the professional and collegiate sports world, at least at the pleading stage.

Plaintiff Patrick Dang alleged that Reebok’s exclusive licensing agreement caused Dang to pay an anticompetitive overcharge on purchases of apparel bearing NFL team logs and other NFL intellectual property. Dang alleged that the agreement violated Sherman Act Section 1 and sought injunctive relief on behalf of a nationwide class of indirect purchasers. Dang also alleged that the agreement violated California’s Cartwright Act and Unfair Competition Law, and sought to represent a class of California indirect purchasers.

In their motion to dismiss, defendants argued that Dang’s alleged relevant markets for NFL apparel and NFL apparel licenses were too narrow because a relevant market cannot be based on a single brand or trademark. The Court disagreed, holding that the alleged market consisted of all 30 NFL teams’ logos, and all of those teams competed with each other for apparel sales throughout the country. In addition, unlike trademarks that only serve to identify origin, NFL team logos “may very well be the products themselves that consumers seek to purchase.” Furthermore, the Court found that non-NFL apparel, such as baseball, collegiate, entertainment or fashion apparel “would not suffice as a reasonable substitute” for NFL apparel.

Defendants also argued that plaintiff lacked standing under Associated General Contractors of Cal., Inc. v. Cal. State Council of Carpenters (“AGC”), 459 U.S. 519 (1983) because he was not a participant in the market where competition was allegedly restrained; Dang was a retail consumer of NFL apparel, but the alleged restraint occurred in the upstream market for NFL apparel licenses. The Court disagreed. As to the retail NFL apparel market, Dang’s allegations were sufficient to establish standing under AGC because he “clearly states that he participated in this market and suffered an injury in the form of an ‘anticompetitive overcharge.’” As to the NFL apparel license market, Dang’s alleged injury in the retail market was “inextricably intertwined” with defendants’ alleged licensing conduct because “the relevance and value of the apparel to the consumers lie in their containing and displaying the logos and trademarks of NFL teams.” Moreover, Dang claimed that he paid an overcharge that was “directly traceable to the licensing market.”

Finally, the court rejected defendants’ argument that the complaint lacked sufficient detail regarding the nature of Dang’s purchases (type of apparel, identity of manufacturer, where it was purchased). The Court held that the complaint had sufficiently alleged an exclusive licensing agreement that would affect all NFL apparel purchases.

The decision could open the floodgates for plaintiffs to file similar cases challenging exclusive licensing deals involving other professional or collegiate sports organizations. Indeed, even other kinds of exclusive licensing agreements may be targeted where the licensed intellectual property can be alleged to be what consumers really want. Whether Dang can actually establish his allegations remains to be seen. Consumers looking for jackets with NFL team logos might find non-branded jackets to be reasonable substitutes if they are lower priced.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.