There is no doubt that there this is a cognizable claim here. The Sherman Act prohibits contracts in restraint of trade and the exclusive contract restrains trade by preventing other game manufacturers from entering into licensing agreements. This is enough to set out a claim under the Sherman Act. That said, I doubt anything meaningful comes out of the case. The claims here are going to be reviewed under what's called the Rule of Reason, which allows the defendants to present an argument as to why the challenged agreement provides added benefit or efficiency. It wont be particularly difficult for the defendants to provide an efficiency story here (something as simple as "its more efficient to negotiate with a centralized seller of rights than to negotiate with each seller individually" could be sufficient, and similar arguments have been accepted in the past). Just to give a sense of the mountain plaintiffs are facing here, a recent study showed that plaintiffs have only won once in something like the past 225 antitrust cases reviewed under the Rule of Reason and which have been carried all the way through appeal.
Of course, the wild card in all of this is the Supreme Court's decision in American Needle, but it's not clear how courts are going to interpret that case at this point. For what it's worth, all American Needle said was that the NFL's exclusive licensing was not per se illegal, and that it had to be reviewed under the Rule of Reason. Given the numbers above, I doubt the defendants are going to struggle here.
The other caveat is that this might settle, but I'm not sure why the defendants would settle here at least until they've lost their motion to dismiss and motion for summary judgment. And even then, I'm not sure what or how much you could reasonably expect to get out of a settlement.
To summarize: There's something here as far as the plaintiffs are concerned. That said, don't hold your breath that you'll actually see anything out of this.
Recent Comments
Michigan 23 - ND 16
There is no doubt that there this is a cognizable claim here. The Sherman Act prohibits contracts in restraint of trade and the exclusive contract restrains trade by preventing other game manufacturers from entering into licensing agreements. This is enough to set out a claim under the Sherman Act. That said, I doubt anything meaningful comes out of the case. The claims here are going to be reviewed under what's called the Rule of Reason, which allows the defendants to present an argument as to why the challenged agreement provides added benefit or efficiency. It wont be particularly difficult for the defendants to provide an efficiency story here (something as simple as "its more efficient to negotiate with a centralized seller of rights than to negotiate with each seller individually" could be sufficient, and similar arguments have been accepted in the past). Just to give a sense of the mountain plaintiffs are facing here, a recent study showed that plaintiffs have only won once in something like the past 225 antitrust cases reviewed under the Rule of Reason and which have been carried all the way through appeal.
Of course, the wild card in all of this is the Supreme Court's decision in American Needle, but it's not clear how courts are going to interpret that case at this point. For what it's worth, all American Needle said was that the NFL's exclusive licensing was not per se illegal, and that it had to be reviewed under the Rule of Reason. Given the numbers above, I doubt the defendants are going to struggle here.
The other caveat is that this might settle, but I'm not sure why the defendants would settle here at least until they've lost their motion to dismiss and motion for summary judgment. And even then, I'm not sure what or how much you could reasonably expect to get out of a settlement.
To summarize: There's something here as far as the plaintiffs are concerned. That said, don't hold your breath that you'll actually see anything out of this.