monopoly

American Needle, Inc. v. National Football League, et al.

Issues

Is a professional sports league a single entity under Section 1 of the Sherman Act?

 

In 2001, the National Football League ("NFL") granted Reebok International Ltd. ("Reebok") an exclusive license to manufacture headwear featuring the logos and trademarks of every professional football team in the NFL. Because of this new arrangement, American Needle, Inc. (“ANI”) lost its 20-year license to manufacture such apparel. ANI argues that the NFL's contract with Reebok violates the Sherman Act, because the NFL and its member teams should not be considered a single economic entity. The NFL and Reebok contend that the member teams are united to produce a common product, namely professional football games, and thus are a single entity that is not subject to the regulations of the Sherman Act. In this case, the U.S. Supreme Court will decide whether or not the NFL is a single entity under Section 1 of the Sherman Act.

Questions as Framed for the Court by the Parties

1. Are the NFL and its member teams a single entity that is exempt from rule of reason claims under Section 1 of the Sherman Act simply because they cooperate in the joint production of NFL football games?

2. Is the agreement of the NFL teams among themselves and with Reebok International, in which the teams agreed not to compete with each other in the licensing and sale of consumer headwear and clothing decorated with the teams' respective logos and trademarks, and not to permit any licenses to be granted to Reebok's competitors for a period of ten years, subject to a rule of reason claim under Section 1 of the Sherman Act?

Respondent, National Football League (“NFL”), is an unincorporated association of 32 professional football teams that produces an annual season of football games and the Super Bowl championship game. See American Needle, Inc. v.

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Additional Resources

·      Wex: Antitrust

·      Washington Post: Trust-busting the NFL

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Apple Inc. v. Pepper

Issues

Are App Store customers “direct purchasers” of Apple who have standing to bring a suit alleging antitrust violations?

In this case, the Supreme Court will determine whether customers of the iPhone’s App Store are considered direct purchasers of Apple. The question of direct purchaser status under the Illinois Brick doctrine is necessary to grant standing and proceed with an antitrust class action accusing Apple of monopolizing the market for iPhone apps. The Ninth Circuit held, and the class action representatives now argue, that customers of the App Store are direct purchasers because Apple functions as a distributor for app developers. Apple disagrees, arguing that it sells its distribution services to app developers, who are its direct purchasers; moreover, Apple asserts that it does not possess key price-setting power. The Court’s decision in this case will have implications for who may bring antitrust actions, potentially opening the door to duplicative damages and excessive private litigation.

Questions as Framed for the Court by the Parties

Whether consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense.

In 2007, Apple released the original iPhone. In re Apple iPhone Antitrust Litig., 846 F.3d 313, 315–16 (9th Cir. 2017). One year later, Apple launched the “App Store,” through which iPhone users may purchase and download applications (“apps”).

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Laboratory Corporation of America Holdings v. Metabolite Laboratories, Inc. and Competitive Technologies, Inc.

Issues

To what extent can an inventor patent a method for detecting vitamin deficiency when the patent seeks to grant the inventor exclusive rights to a natural scientific principle?

 

Three medical school professors from the University of Colorado and Columbia University developed a method to diagnose low levels of cobalamin and folate, two vitamins found in the blood serum of warm-blooded animals. After patenting this process, the patent was assigned to Competitive Technologies, Inc. and Metabolite Laboratories for distribution. Competitive Technologies, Inc. and Metabolite Laboratories in turn sublicensed the patent to Laboratory Corporation of American Holdings. Competitive Technologies and Metabolite Laboratories filed suit against Laboratory Corporation of American Holdings for induced infringement of the patent and contributory infringement. Judgment was rendered against Laboratory Corporation of American Holdings at trial and was affirmed by the Court of Appeals for the Federal Circuit. Laboratory Corporation of American Holdings in turn appealed to the United States Supreme Court in an effort to seek clarification about the substantive scope of method patents. The Supreme Court's decision in this case has the potential to alter the balance of the patent system.

Questions as Framed for the Court by the Parties

Whether a method patent setting forth an indefinite, undescribed, and non-enabling step directing a party simply to 'correlat[e]' test results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result.

Three medical school professors from the University of Colorado and Columbia University developed a method to diagnose low levels of cobalamin and folate, two vitamins found in the blood serum of warm-blooded animals. Brief for Respondents at 1-2, 6.

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Sherman Antitrust Act

Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc.

Issues

Whether a business can be held to violate antitrust laws if it is shown that the business purchases too many or pays too much for materials in order to keep competitors from purchasing those materials at a fair price, or whether another standard should apply, such as the standard in Brooke Group, which requires showing that the business sustained a loss as a result of its action but was likely to make the money back once it had a monopoly.

 

Ross-Simmons Hardwood Lumber Co., Inc., a sawmill, went out of business when Weyerhaeuser, a giant in the forest industry, used its market share to drive up the price of sawlogs. The issue is in this case is whether the jury used the proper standard to find that Weyerhaeuser had violated the antitrust provisions of the Sherman Act. Weyerhaeuser argues that the Brooke Group standard should have applied, whereby a plaintiff must show that the defendant: (1) paid so much for raw materials that the price at which it sold its products did not cover its costs; and (2) had a “dangerous probability” of subsequently recouping those losses. Ross-Simmons advocates for the looser standard applied by the Ninth Circuit, whereby liability may be established by showing that the defendant purchased more raw materials “than it needed” or paid a higher price for those inputs “than necessary” so as to prevent competitors buying the materials at a “fair price.” The Court’s decision could result in a dramatic shift in either of two directions: it could either shield large corporations from suits related to the corporation’s influence on the market, or give small businesses a powerful weapon to wield against the pressures that a large corporation can exert.

Questions as Framed for the Court by the Parties

In Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993), the Court held that an antitrust plaintiff alleging predatory selling must prove that the defendant (I) sold its product at a price level too low to cover its costs and (2) had a dangerous probability of recouping its losses once the scheme of predation succeeded.

The question in this case is whether a plaintiff alleging predatory pricing may, as the Ninth Circuit held, establish liability by persuading a jury that the defendant purchased more inputs "than it needed" or paid a higher price for those inputs "than necessary," so as "to prevent the Plaintiffs from obtaining the [inputs] they needed at a fair price"; or whether the plaintiff instead must satisfy what the Ninth Circuit termed the "higher" Brooke Group standard by showing that the defendant (I) paid so much for raw materials that the price at which it sold its products did not [cover] its costs and (2) had a dangerous probability of recouping its losses.

From a bird’s eye view, a patchwork of green and hazy brown shapes weaves together much of the Pacific Northwest, especially the area surrounding the Columbia River, which serves as the border between Oregon and Washington. The logging industry has been active in the area for over a century, leaving that trademark quilt pattern as tracts of forest are harvested.

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