Distribution, Competition, and Antitrust / Intellectual Property (IP) Law

Single-Brand Market Claims Are Not Dead

A photo of the Logo of the National Football L...

A photo of the Logo of the National Football League (NFL) (Photo credit: Wikipedia)

Modern antitrust law’s focus on inter-brand competition has made it much more difficult to plead and prove single-brand market claims. The law’s concern with inter-brand competition is so strong that some observers have all but written off such claims as essentially impossible to maintain.

But that would be a mistake. Proper, careful pleading in appropriate cases can at least take single-brand claims past a motion to dismiss.

For example, on August 2, the Northern District of California denied a motion to dismiss challenging antitrust claims arising out of the National Football League’s exclusive license deal with Reebok International, Inc. See Dang v. San Francisco Forty Niners, et al., Case No. 5:12-CV-5481 (EJD) (August 2, 2013) (Davila, J.). The court held that the putative class plaintiffs had adequately alleged a relevant market for the licensing of the trademark, logos, and other emblems of individual NFL teams for use in/on clothing.

True, the court noted that the plaintiffs had alleged “a market consisting of the intellectual property of at least thirty different and competing professional football teams as well as the intellectual property owned by the NFL itself.” But in doing so, it was rejecting the defendants’ argument that the market was “sports apparel or apparel in general.” Because the NFL decides which teams are its members, NFL-branded products in some sense constitute or belong to a single brand.  As the court wrote, “the logos and trademarks of the NFL and NFL teams may very well be the products themselves that consumers seek topurchase” (emphasis added).

The court in Lima LS PLC v. PHL Variable Ins. Co., Case No. 3:12-cv-1122 (WWE) (July 1, 2013) (Eginton, J.), was even clearer that a single-brand product market can be cognizable. There, the plaintiff advanced a Kodak-type aftermarket lock-in claim and alleged that the defendant insurance company monopsonized, or attempted to monopsonize, the secondary market for its own life insurance products. (Full disclosure: I worked on the briefs for the plaintiff.)

It is certainly true that it is not easy to prevail upon these sorts of claims — but it is not in all cases impossible.

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