By Nneka Ukpai

Although federal courts may consider baseball’s antitrust exemption to make about as much sense as the infield fly rule, last week’s decision by the U.S. Court of Appeals for the Ninth Circuit in City of San Jose v. Commissioner of Baseball shows that courts still consider themselves bound to invoke that anachronistic exemption to call antitrust plaintiffs out.

According to a three-judge panel of the Ninth Circuit, the U.S. District Court for the Northern District of California correctly held that the baseball industry’s historic antitrust exemption required the court to dismiss antitrust claims against Major League Baseball (“MLB”).

In June 2013, the City of San Jose filed suit against MLB alleging a conspiracy to prohibit the Oakland Athletics’ relocation to downtown San Jose.  According to the lawsuit, the relocation of the Oakland A’s to San Jose was blocked solely because the territorial rights to San Jose and its suburbs belong to the San Francisco Giants.  The City of San Jose alleged that the exclusive territorial rights agreement among MLB teams was a “blatant market allocation scheme.”  In October 2013, District Judge Ronald Whyte dismissed these claims and barred the City of San Jose from refiling, holding that “MLB’s alleged interference with the A’s relocation to San Jose is exempt from antitrust regulation.”  Judge Whyte said he was bound by precedent, but agreed “with the other jurists that have found baseball’s antitrust exemption to be ‘unrealistic, inconsistent, or illogical’” and agreed that the “exemption is an ‘aberration’ that makes little sense given the heavily interstate nature of the ‘business of baseball’ today.”

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A View from Constantine Cannon’s London Office

By Yulia Tosheva and James Ashe-Taylor

The European Commission has announced that the European Parliament and the European Council have reached a long-awaited political agreement on the Commission’s proposal for a Regulation on Interchange Fees for Card-based Payment Transactions.

The Regulation will introduce maximum fees for four-party card schemes’ consumer debit and credit cards, prevent card schemes from forcing retailers to accept all types of cards regardless of their fees, and establish transparency rules for all transactions. The Commission has already ruled that interchange fees set by MasterCard are in violation of EU antitrust laws and, after a seven-year court battle, MasterCard lost its final appeal before the European Court of Justice in September 2014.

Interchange fees represent about 70% of the approximately 13 billion euros a year retailers pay banks to handle payment card transactions. The Regulation is expected to have a profound impact on the card industry as a whole but its effect is likely to be particularly felt in markets such as Germany, where average credit card rates stand at 1.8%, and Poland, where average debit card charges are 1.6%.

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By David Golden

The ongoing battle over what constitutes a “reasonable” licensing royalty for standard-essential patents has now been joined by the U.S. Court of Appeals for the Federal Circuit with its decision in Ericsson, Inc. v. D-Link Systems, Inc., concerning the alleged infringement of patents essential to the ubiquitous Wi-Fi networking technology.

This definitional battle is also being fought in standard-setting organizations, such as the Institute of Electrical and Electronics Engineers (“IEEE”), the promulgator of Wi-Fi standards, which recently adopted a resolution that defines the calculation of a “Reasonable Rate” for standard-essential patents.

Many modern electronic devices, such as smartphones and tablets, incorporate voluntary industry-wide communication and networking standards, such as Wi-Fi, cellular data, and Bluetooth technologies. Generally, the members of organizations that create and maintain such standards compete in the markets for these products, and frequently own patents that are essential to the implementation of the standards. Thus, the member companies’ collective selection of technologies to include in the organization’s standard can prove advantageous in both product and technology licensing markets. It is not surprising then that the Supreme Court has described private industry standard-setting organizations as “rife with opportunities for anticompetitive activity.”

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