[The.Nacirema.Dream]

It's incredibly frustrating when people who know nothing about the law make blanket statements of general applicability. I wrote this awhile ago but I re-post with additions in italics:

"The sole issue in the American Needle case is the trial courts finding, and the 7th Circuit Court of Appeals affirmation, that the NFL and its 32 teams are a "single entity," ie. akin to a parent corporation and a wholly-owned subsidiary. If found to be so, section 1 of the Sherman Act, which outlaws "every contract, combination in the form of trust or otherwise, or conspiracy..." by definition cannot apply because for a section 1 violation there has to be two or more parties working in concert.

The lower courts found that EVERYTHING the NFL does (i.e. apparel licensing, intellectual propery licensing, etc.) is protected from scrutiny because it is a single entity. Hence, the NFL can NEVER be challenged under Section 1 Sherman Act for for its conduct because it is a single party.

By contrast, section 2 of the Sherman Act outlaws "monopolizing or attempting to monopolize" by a single entity. American Needle also brought a claim under section 2 (which was also rejected), however that issue is NOT going to be argued in front of the Supreme Court.

Thus, while the lower courts found the NFL is a single-entity meaning it can be charged under Section 2, they held that the NFL was NOT monopolizing. The reasoning is complex, but at its core the reasoning is that the NFL competes with ALL entertainment, not just other football products, and not just other sports. So the lower courts decided that people make the choice between seeing a music concert, for instance, or an NFL game.

No matter what you think about this, American Needle is NOT challenging this finding, so the Supreme Court can't decide the issue, as it can only hear issues specifically brought in front of it. Because American Needle is not bringing it, however, it can be assumed that they feel that this finding was not incorrect, either.

The last case the Supreme Court decided using the "single entity" theory was in 1984 (Copperweld Corp. v. Independence Tube Corp.). Since then, lower courts have stretched the "single entity" theory to various other business arrangements, ie. affiliated companies involved in joint ventures. The Supreme Court expressing an interest in this case is in all likelihood a signal that lower courts have gone too far in their findings, and the Supreme Court will clarify the doctrine.

Meaning that the Supreme Court feels that lower courts have granted "single entity" immunity from Section 1 violations to too many types of business arrangements.

I don't know how the Supreme Court will decide this particular case in relation to the NFL. What I do know, though, is that EVEN IF American Needle wins, the decision will ONLY be applicable to the licensing of apparel by the NFL. It will NOT mean that ALL exclusive deals the NFL has will automatically be considered a Sherman Act violation.

The reason for this is that I can guarantee that the Supreme Court will say that every business arrangement by the NFL (i.e. apparel licensing, intellectual property licensing, etc., which are DISTINCT things) will have to be looked at on a "case-by-case basis," and that certain supposedly monopolistic activities of the NFL will be allowed because the "NFL can only function as one source of economic power when collectively producing NFL football (The lower courts words)."

And my guess is that while the Supreme Court may found this justification NOT worthy in the apparel licensing context, I would venture to say that it carries MUCH more weight in a intellectual property licensing context.

So please stop talking like this American Needle case is some panacea. In a practical sense it is extremely important for the NFL and could effect its ability to collectively do business in the future. But it's not like if American Needle wins EA will automatically lose the license.