The United States Supreme Court recently ruled that agreements among associate members to license their trademarks to one vendor may violate the Sherman Act. In American Needle, Inc. v. National Football League, the National Football League Properties ("NFLP") terminated its nonexclusive license with American Needle, Inc. to make and sell apparel bearing the NFL team insignias and granted Reebok International Ltd. an exclusive 10-year license to make and sell trademarked headwear for all 32 NFL teams. American Needle filed suit alleging violations of Sections 1 and 2 of the Sherman Act and the NFL and NFLP responded that they were incapable of conspiring because as an association they were a single economic enterprise.
The Supreme Court held that the issue was not whether the NFL and NFLP was a single economic enterprise. Rather, this issue was whether the alleged contract, combination, or conspiracy was concerted action amongst separate economic actors pursuing separate economic interests such that the agreement deprived the marketplace of independent decision makers. The Supreme Court found that the separate teams competed in the marketplace for intellectual property. Each team was pursuing interests of each corporation and each team was a potential independent center of decision-making, which, when centralized through NFLP, deprived the marketplace of actual or potential competition.