You may not realize it, but whenever you purchase a NFL jersey or hat, you are purchasing property which may be the subject of a major intellectual property dispute.

In the 2010 case American Needle v. National Football League (08-661), the U.S. Supreme Court unanimously ruled that the NFL cannot act as one entity when licensing team apparel. The dispute arose after a decision was made by the NFL in 2001 to give Reebox an exclusive 10-year contract to manufacture various pieced of apparel featuring team logos. Prior to that, each of the 32 NFL teams contracted with its own vendors to produce apparel for that particular team. 

The Court ruled that, in this instance, the league should be considered 32 separate teams, and not a single business.

“Decisions by the NFL teams to license their separately owned trademarks collectively and to only one vendor are decisions that deprive the marketplace of independent centers of decision-making and therefore of actual or potential competition,” Justice John Paul Stevens wrote in the court’s decision. 

The case was brought by American Needle, Inc., an Illinois-based sports apparel maker that lost business through the NFL’s decision to work exclusively with Reebok..

Pro sports represents a unique challenge to the court because, in some cases, the league acts as one entity, such as maintaining rules and structure that all teams must follow. In other cases, teams act as separate entities which compete against each other.  

The Supreme Court ruling overturns a lower court ruling that, in cases of  intellectual property,  the NHL should be considered one league, not 32 separate entities. It is now up to the lower court to set up guidelines for reworking licensing agreements for NFL football apparel.

SOURCE: Mears, Bill, "Justices rule against NFL over apparel licensing," CNN.com, May 24, 2010.  http://www.cnn.com/2010/CRIME/05/24/nfl.lawsuit/index.html?eref=igoogle_cnn