By Jeffrey I. Shinder and Ankur Kapoor

As antitrust law evolves to address new problems posed by ever-shifting dynamics in industries both old and new, two schools of thought are vying for control of challenges to reverse-payment settlement agreements that resolve patent infringement litigation brought by pharmaceutical manufacturers against potential generic competition.

One school favors the establishment of bright-line rules to give firms and courts predictability in the law.  The Supreme Court’s still controversial Illinois Brick decision, which generally limits damages recoverable under federal antitrust law to direct purchasers, is one example of this approach.  (Expressing the contrary view on whether indirect purchasers should have standing to recover their damages are the many state antitrust laws allowing indirect-purchaser recovery and the Supreme Court of Canada’s rejection of the Illinois Brick doctrine.)

Another school of thought emphasizes that, in antitrust law, substance and economic reality should trump form because rigid, bright-line rules inevitably encounter cases in which application of a rigid rule leads to undesirable results, or, worse, give firms with market power a roadmap on how to exclude competition without fear of antitrust scrutiny.  This school of thought is grounded in the recognition that, because restraints often arise in factual and legal contexts as complex as the industries in which they arise, they cannot properly be evaluated without assessing and balancing their anticompetitive and procompetitive effects.   While this inquiry can sometimes be taxing, it is often necessary to reach a result that promotes unrestrained competition and markets – which generally are valued by all schools of thought.  The Supreme Court reaffirmed this principle in 2010 with its decision in American Needle v. NFL, which held that the National Football League could be considered a “combination” or “conspiracy” subject to Section 1 of the Sherman Act, depending on the specific factual and economic circumstances of the NFL’s member football teams’ conduct at issue.

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The chairman of the House Judiciary Committee, Rep. John Conyers (D.-Mich.), has announced that on January 20, the Committee’s Subcommittee on Courts and Competition Policy will hold a hearing on the Supreme Court’s pending decision in American Needle, Inc. v. National Football League. 

The notice of the hearing can be found here:

http://judiciary.house.gov/hearings/hear_100120.html

In the case below, the Seventh Circuit held that the NFL was a single entity for antitrust purposes – not a group of 32 separate companies that could conspire together. 

            That decision can be found here: 

http://www.ca7.uscourts.gov/tmp/T40LC5H9.pdf

            The Court granted certiorari last June and heard arguments on January 13.  The Subcommittee has not as yet released a witness list for the hearing.

It may be a Hail Mary pass, but New Orleans Saints quarterback Drew Brees has thrown a long bomb to the Supreme Court with a Washington Post op-ed that warns the Supremes that their decision in the upcoming case of American Needle, Inc. v. National Football League, could end up sacking both professional athletes and antitrust enforcement.

At issue in the American Needle case is the extent to which the NFL – and by implication all professional sports leagues – should be considered a single entity immune from antirust claims of conspiracy.  The Supreme Court is slated to hear oral arguments in the case on Wednesday.

In his op-ed, Brees expresses concern that the Seventh Circuit’s decision in American Needle – if affirmed or extended – could enable football teams to agree to abolish free agency and otherwise eliminate all competition from their multibillion dollar business without fear of antitrust scrutiny.

In a previous post, this blog examined the far-reaching implications the American Needle case could have for antitrust regulation of all professional sports leagues in the U.S.

Sports leagues and other joint ventures may score an antitrust victory in the Supreme Court this term that makes the Baseball Antitrust Exemption look strictly minor league.

The Supreme Court will hear the case of American Needle, Inc. v. National Football League, which concerns the NFL’s practice of licensing NFL and team logos and other intellectual property exclusively through the NFL’s wholly-owned subsidiary, NFL Properties LLC.

At issue is the extent to which joint ventures, like the NFL, can be considered “single entities” under antitrust law—as opposed to multiple, collectively-acting ball clubs—and thus not held subject to the anticonspiracy prohibitions of § 1 of the Sherman Act.  American Needle thus has the potential to be a watershed case in antitrust analysis of sports leagues and other joint ventures. click here for more »