The 7th U.S. Circuit Court of Appeals affirmed a lower court decision on Monday that could pave the way for professional sports franchises to operate as a single entity without fear of running afoul of antitrust law.
The plaintiff in the case was American Needle Inc., which prior to 2000 was one of several vendors licensed to make apparel for the National Football League. In 2000, the NFL awarded an exclusive license for most of its apparel to Reebok. American Needle then filed suit against the NFL in U.S. District Court for the Northern District of Illinois, claiming that the league was in violation of the Sherman Antitrust Act, which outlaws any “contract, combination… or conspiracy, in restraint of trade.” As American Needle saw it, because each of the individual teams separately owned their team logos and trademarks, their collective agreement to award the exclusive headwear license to Reebok was a conspiracy to restrict other vendors’ ability to obtain licenses for the teams’ intellectual property. In 2007, the court granted the NFL summary judgment in the case, finding that in its marketing efforts, the NFL could be considered a single entity, and as such was not in violation of antitrust law.
