The National Football League won a licensing suit against American Needle over its past deal to make Reebok its exclusive headwear licensee. The U.S. Court of Appeals for the 7th Circuit affirmed a summary judgment ruling that the National Football League is a “single entity” whose business choices are nearly impossible to challenge under Section 1 of the Sherman Antitrust Act, which bars agreements in restraint of trade.


American Needle in 2005 had filed its intial suit against the the NFL, claiming it violated antitrust laws when it agreed to provide sneaker-giant Reebok with an exclusive headwear license to collectively market the NFL teams’ intellectual property. American Needle argued that the NFL teams function as competitors and not partners and, therefore, the league’s decision to provide an exclusive headwear license was unlawful. After the court found the league was a single entity, it concluded that American Needle had no claim “because, as a single entity, the NFL and its member teams could collectively license their intellectual property ‘to one or many without running afoul of the antitrust laws.’”


Covington & Burling, which has represented the NFL since 1960, defended the league in the case. According to Gregg Levy, a Covington partner and chairman of the firm’s litigation group, the ruling marked the first time such a judgment has ever applied to a single league, and it has the potential to affect other professional sports leagues.


“The logic the court used suggested this decision could have a much broader reach,” Levy said.