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American Needle, Inc. v. National Football League | 560 U.S. 183 (2010)

Section one of the Sherman Antitrust Act, which prohibits contracts, combinations, and conspiracies in restraint of trade or commerce, requires concerted action involving more than one entity.1 Consequently, section one doesn’t apply to conduct by a single entity, even though such action may lead to anticompetitive results.2 In the 2010 case American Needle, Incorporated versus National Football League, the United States Supreme Court considered whether the NFL’s licensing activities constituted concerted action under section one of the Sherman Act.

The NFL is an unincorporated association that includes thirty-two separately owned professional football teams, each of which have their own name, colors, logos, and other intellectual property. Prior to 1963, each team made its own arrangements for licensing their intellectual property and marketing items that were trademarked. But in 1963, the teams formed National Football League Properties, or NFLP, to collectively develop, license, and market their intellectual property.

Between 1963 and 2000, NFLP granted nonexclusive licenses to numerous vendors, including American Needle, to manufacture and sell apparel featuring team logos. But in December of 2000, NFLP granted a ten-year exclusive license to Reebok to manufacture and sell trademarked headwear. Following the deal, the NFLP declined to renew American Needle’s license.

Subsequently, American Needle sued the NFL in federal district court, alleging, in part, that the agreements between the NFL, its teams, NFLP, and Reebok, violated section one of the Sherman Act. Specifically, American Needle claimed that the NFL and NFLP conspired to restrict the distribution of the teams’ intellectual property rights. In response, the NFL argued that the teams, the NFL, and the NFLP were incapable of conspiring within the meaning of section one because they’re a single entity that can’t take concerted action.

Following discovery, the NFL moved for summary judgment, which the district court granted. American Needle appealed to the Seventh Circuit, which affirmed. In so affirming, the court stated that in making a single-entity determination, courts must examine whether the conduct in question deprived the marketplace of independent sources of economic control. Nonetheless, the court found that the NFL, its teams, and NFLP were a single entity that couldn’t conspire to restrict trade. The United States Supreme Court granted cert.

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