By Brooke A. Wiener, J.D.
West Palm Beach, FL

The Court of Appeals for the 7th Circuit has affirmed, in an antitrust case, that the exclusive licensing of all professional football teams marks to one vendor is not a violation of the Sherman Act.

NFL Properties is an unincorporated organization of 32 separately owned teams. Each team owns its own trademarks - team names, logos, slogans, etc. In 1963, the NFL created NFL Properties, Inc., a corporate entity to (1) develop, license, and market intellectual property that the teams owned, such as their logos and trademarks; and (2) "conduct and engage in advertising campaigns and ventures on behalf of the NFL and [its] member teams."

In 2000, the teams authorized NFL Properties to enter into an exclusive license for headwear with one vendor. Reebok became that vendor, with a 10 year license. American Needle, an ousted vendor, sued the teams, NFL Properties, and Reebok under section 1 of the Sherman Act, claiming that the group licensing of the separately owned team trademark properties was a contract, combination or conspiracy in restraint of trade.

The Seventh Circuit held that for the purpose of joint marketing and licensing of the NFL Brand the NFL, NFL Properties and the teams acted as a "single entity" because they did not act as economically separate entities when promoting the NFL Brand. Therefore, the Court dismissed American Needle's claim under section 1 of the Sherman Act.

American Needle's claim under section 2 of the Sherman Act, i.e. an illegal attempt to monopolize the markets for NFL licensed merchandise, also failed because the NFL, NFL Properties and the teams as a single entity were free to license their intellectual property on an exclusive basis.

American Needle has petitioned for a writ of certiorari to the Supreme Court of the United States.

American Needle Inc. v. National Football League, 538 F.3d 736 (7th Cir. Aug. 18, 2008).