US Supreme Court Revives Antitrust Suit Against NFL

The U.S. Supreme Court on Monday revived an antitrust lawsuit against the National Football League that challenged its apparel licensing deal with Reebok International, ruling that lower courts were too quick to throw out the case.

The court, in a unanimous opinion by Justice John Paul Stevens, rejected the NFL's argument that the league should have broad protection from antitrust lawsuits because it operates as a "single entity" business, not as 32 separate team businesses that are potential competitors.

The court said there are times that NFL teams need to cooperate, but it said that in the area of licensing, the league wasn't immune from an antitrust lawsuit because teams are potentially competing suppliers.

"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," Stevens wrote.

The justices sent the case back to a lower court for further examination of allegations made by American Needle Inc., which sued the NFL in 2004.

At issue was a 10-year deal the league struck with Reebok, a unit of Adidas AG (ADS.XE), in 2001 that gave the company an exclusive license to market NFL caps and apparel.

American Needle, which had made and sold hats bearing NFL logos since the 1950s, sued the league, its teams and Reebok after it lost its right to make and sell NFL-licensed products. The company said the NFL-Reebok agreement was an illegal restraint of trade.

Two lower courts agreed with the NFL that the league was immune from antitrust liability because it acted as a single entity that licensed its teams' logos to promote NFL football. Those courts said antitrust law didn't prohibit NFL teams from cooperating so the league could compete against other entertainment providers.

The case is American Needle Inc. v. National Football League, 08-661.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

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