By Talon Powers. Full text here.
After the Supreme Court’s decision in American Needle, Inc. v. National Football League in 2010, the National Football League’s (NFL) ability to license league intellectual property as a collective whole has been called into question. If the caselaw that emerges from American Needle completely precludes the League from being treated as a single entity, any licensing agreement of the NFL or other professional sports league risks being challenged as a concerted conspiracy in restraint of trade under Section 1 of the Sherman Antitrust Act. Applying the Sherman Act to activities taken by the NFL in licensing its own intellectual property in the same way it has been applied to teams collectively licensing their individual intellectual property would create problems for the NFL’s agreement with Electronic Arts, for obtaining essential sponsorship money, for professional sports collective bargaining agreements more broadly, and for every other major professional sports league in protecting league interests against players and renegade owners.
While American Needle clearly states that the NFL cannot be uniformly treated as a single entity, the League acts very differently when it packages and sells team logos (like in American Needle) than it does when it licenses every aspect of the League together in order to create a virtual recreation of the League as a whole (like in its license with Electronic Arts). The distinction between the League bundling its teams’ intellectual property and the League licensing itself as a whole justifies another look at whether leagues like the NFL should be granted single-entity status in limited and specific instances.
This Note proposes a Court-imposed exemption to the general rule in American Needle that differentiates between licensing agreements that collectively license individual team intellectual property that has been bundled together and those agreements that license the intellectual property of the League as a whole. The rule in American Needle should continue to be applied in cases where directly competitive products are licensed together. Where the intellectual property being licensed represents the League as a holistic entity, however, this Note argues that such licensing agreements should be upheld against Sherman Act challenges under the Court’s single-entity precedent.