(CN) – The National Football League is not shielded from antitrust claims over its exclusive with Reebok for logo-adorned headgear, the Supreme Court ruled Monday. “Each of the teams is a substantial, independently owned, and independently managed business,” Justice John Paul Stevens wrote for the unanimous court, rejecting the NFL’s claim that its 32 teams act as a single entity, not a group of conspiring profit-making enterprises.
“When each NFL team licenses its intellectual property, it is not pursuing the ‘common interests of the whole’ league but is instead pursuing interests of each ‘corporation itself,'” Stevens wrote.
The league had argued that its teams license their intellectual property through a single outlet, the National Football League Properties, which is akin to a merger. A single entity is not capable of engaging in an antitrust conspiracy, the NFL claimed.
“The NFL respondents may be similar in some sense to a single enterprise that owns several pieces of intellectual property and licenses them jointly, but they are not similar in the relevant functional sense,” Stevens wrote.
“Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned.”
The justices reversed and remanded the 7th Circuit’s ruling for the NFL.
The ruling gives American Needle, a 20-year vendor, another shot at claiming that the NFL’s exclusive contract with Reebok violates the Sherman Antitrust Act, which bars companies from creating any “contract, combination or conspiracy in restraint of trade.”
In 2001, Reebok bought the exclusive right to produce NFL headgear with team logos.
The ruling means that antitrust law will continue to be “a thorn in the NFL’s side,” as Willamette University law professor Jeffrey Standen wrote in a paper outlining the case.