From Dallas Cap to American Needle and Beyond: Antitrust Law’s Limited Capacity to Stitch Consumer Harm from Professional Sports Club Trademark Monopolies

Abstract

A nearly fifty-year contemporaneous trend of increasing legal protection for sports team trademarks, collective exclusive licensing of professional sports team trademarks, and antitrust litigation regarding its validity culminated in the United States Supreme Court’s 2010 decision in American Needle, Inc. v. NFL, which rejected the NFL’s single-entity defense. Collective exclusive trademark licensing by professional sports leagues generally does not have significant incremental anticompetitive effects beyond the consumer harm already caused by each individual club’s lawful trademark monopoly, which likely are outweighed by procompetitive benefits in many instances. However, in order for antitrust law to minimize the consumer harm caused by the extension of trademark law protection beyond its traditional boundaries to create professional sports club trademark monopolies, the collective granting of exclusive product category licenses should be invalidated under the quick-look rule of reason because this restraint has clear anticompetitive effects that are not necessary to achieve legitimate procompetitive justifications and/or which may be achieved by a substantially less restrictive alternative.

Keywords: ademark, antitrust, licensing, exclusive, sports team, professional sports, names, logos