*1 that acknowledges denying districts District Court did not err him Plaintiff relief, population do not neces- and the equal voting-age judgment below is Af- equal there will be an sarily mean that firmed. congres- cast within each of votes
number even that that there will
sional district or eligible number of voters in equal an
be argues Plaintiff instead that
each district. voting-age populations are dis-
unequal, required that he is not wrong
tinct wrongs. argu- other This
plead relief for claim that is ment meritless. is MAJOR LEAGUE BASEBALL PROP depend on Article I plausible at all must ERTIES, INC., Plaintiff-Counter that it man- equality the form of claim-Defendant-Appellee, dates; population, of total it could be voters, per- or even might eligible be of v. But there no haps of actual voters. is SALVINO, INC., Defendant presented that Plaintiff has that reason Counterclaimant- that Article I supports requires the thesis Appellant. voting-age population. equal districts Docket No. 06-1867-cv. Plaintiff not Significantly, does assert age proxy is the best voting that available Appeals, United States Court of actually equal voting power. And that Second Circuit. claim enough to make the before us whether, may question One insubstantial. Argued: Jan. 2007. pled equal voting- if Plaintiff had that even Sept. Decided: available, age proxy is the best population plausible. that would be There assertion large proportion in which a districts voting-age population are noncitizens See, ineligible e.g., Hay
or felons to vote.
den,
given
Plaintiff does facts that
might support argument voting- an
age proxy is the best available New equal voting power,
York for we need look Assuming arguendo
no further. that the I requires
claim that Article electoral substantial,
equality might sugges
tion that therefore we should have districts voting-age population
of equal is not. pled
Because Plaintiff has not facts support argument
would if his correct,
theory equality of electoral were
apportionment by voting-age population
would best equality, achieve electoral
his claim Accordingly, insubstantial. *4 (G. McKeown, Milwaukee, T.
James WI Lardner, Foley Mil- Halfenger, Michael & Adler, waukee, WI, Bingham A. Gary NY, brief), McCutchen, York, New on the Plaintiff-Counterclaim-Defendant-Ap- for pellee. Blecher, Angeles,
Maxwell M. Los CA (John Collins, Andrews, E. Blecher & Los brief), CA, on the for Defendanb- Angeles, Counterclaimanb-Appellant. SOTOMAYOR, Before: KEARSE CEDARBAUM, Judges, Circuit *. Judge District concurs, in a Judge SOTOMAYOR separate opinion.
KEARSE, Judge: Circuit (“Salvino”), Salvino, ap- Inc. Defendant judgment much of a final peals from so District Court for the the United States York, New Richard District of Southern Conway Casey, Judge, as dismissed organiza- alleging counterclaims Major plaintiff activities of tion and * York, Cedarbaum, sitting by designa- ern District of New Goldman Honorable Miriam tion. District Court for South- the United States Properties, Inc. A. The Parties and
League Licensing Baseball Dis- (“MLBP”), licensing agent as the exclusive pute (or “MLB”) Major League Baseball for wholly-owned MLBP is a subsidiary of property, § violate 1 of clubs’ intellectual Major League Enterprises, Baseball Inc. Act, 1,§ 15 U.S.C. and as the Sherman (“MLBE”), entity an in which each of the (Salvino state law claims” serting “related (the “Clubs”) 30 current MLB clubs owns 2). appeal The district court brief is, equal interest. MLBP with limited summary granted MLBP’s motion exceptions, agent the exclusive worldwide
judgment dismissing those claims on the
names,
the use of all
logos,
grounds
operations
that MLBP’s
should be
trademarks,
marks,
dress,
service
trade
reason,
the rule of
analyzed under
property
and other intellectual
owned or
(a)
to adduce
failed
evidence to
Clubs,
controlled
the MLB
MLB’s Of-
challenged organization
show that the
(“BOC”),
fice of the Commissioner
have an actual adverse effect on
activities
(collectively
“MLB Intellectual
competition or that MLBP has sufficient
*5
Property”),
products.
on retail
competition mar
power
market
to inhibit
agent
also acts as
for the
with
(b)
Clubs
re-
ket-wide,
any
and
failed to offer
evi
to,
alia,
spect
protection,
inter
trademark
support
dence
its state-law claims. On
control,
services,
quality
challenges
design
royalty ac-
appeal, Salvino
the dismissal of
claim, contending
counting,
auditing.
§ 1
antitrust
required
court
have
evidence
should not
corporation
Salvino is California
power
to market
or actual
regard
sells,
produces,
sports
distributes
col-
competition
but
adverse effect
should
lectibles, including
plush
stuffed
animals
MLBP’s
instead have held
activities either
usually
that are
sports
identified with
ce-
illegal
illegal
“quick-look”
or
under a
per se
2001,
lebrities. Between 1989 and
Salvino
analysis.
regard to
With
Salvino’s state-
obtained licenses from MLBP to use Club
claims,
appeal
its brief on
no
law
contains
marks and other MLB marks on figurines
argument
why
as to
the district court’s
in
players
baseball
uniform.
In the
incorrect,
dismissal was
and we therefore
agreements,
license
promised
Salvino
regard any challenge to the dismissal of
use the marks in
manner other than
abandoned,
generally
those claims as
see
as licensed.
Westchester,
County
Hobbs v.
397 F.3d
(2d
denied,
133,
Cir.),
147
cert.
546 U.S.
1998,
spring
developed
Salvino
340,
(2005);
126 S.Ct.
warranted] public. to the detriment of the period period license or license there- ¶ (Salvino’s 13.) complaint California action after, Logos except use the as licensed (Letter ajgreement” [license under April In MLBP commenced the from MLBP to Salvino dated November Salvino, present against asserting action 1). 1999, at The letter stated that for, claims under federal and state law alia, addition, inter the unauthorized use of in- [i]n trademark and trade dress the trademark constitutes trademark fringement arising out of Salvino’s unau- infringement. The Arizona Diamond- thorized use of MLB marks. Salvino’s that, backs have informed al- [MLBP] California action was transferred to the though they York, reviewed artwork demon- Southern District of New where it action, strating appearance proposed present was consolidated with the they product, gave express never con- with action claims be- Salvino’s California facts, present following ac- The addition to those coming counterclaims above, among tion. described in Part I.A. undisputed. those that are To Motion Dismiss Salvino’s B. MLBP’s § 1 Counterclaim Major League Baseball Eventually, parties’ respective all of the Major League Baseball teams to- claims, Salvino’s counterclaims except gether produce prod- entertainment § 1 alleged violation of against MLBP uct—the “MLB Entertainment Product”— alleged Act and for unfair of the Sherman 2,400 approximately interference with that consists of in- competition and tortious terrelated, California and New York professional games per contract under baseball law, respectively, were either abandoned Clubs, year played by leading the 30 MLB meantime, In the to the extent or settled. separate playoff games for the Ameri- from the pertinent appeal to this district Leagues culminating can and National § 1 counter- court’s dismissal Salvino’s each with season the World Series be- moved, claim, following MLBP some three champion tween the Clubs from the two summary judgment years discovery, Leagues. entertainment product This can that claim. dismissing produced only by be operating Clubs summary judgment support together in the form of a it cannot league; motion, submitted, pursuant Club, produced by any one individual Rules for the South- Rule 56.1 of the Local squads players even a few Clubs. While (“Rule York 56.1” or ern District of New other, single play from Club could each 56.1”), a statement of facts “Local Rule organization of the Clubs into a nation- undisputed contended were league geographic diversity wide Statement”). (“MLBP Rule 56.1 MLBP a championship goal, pursued common in a facts, undisputed that the ana- contended employing structured manner uniform reason, rule of lyzed under the revealed play, vastly rules of has created a different *7 conduct did not violate the Sher- that its product and more marketable than is cre- support man Act. In its factual asser- by ated scrimmages squads between tions, generally MLBP cited documents players single by from a or even ad Club (filed seal, hereby deemed un- under “barnstorming” games hoc between Clubs opin- the extent described in this sealed to (See large league outside of a structure. ion), testimony deposition and submitted Responses Salvino to MLBP Rule 56.1 or sworn declarations to show the admissi- ¶¶ 42.) 41, Statement bility of the cited documents. Product, The MLB Entertainment Salvino, response pursuant in its to Rule cooperation among which the is es- Clubs (“Salvino Response”), principally 56.1 took sential, affects the value of MLB Intellec- many position the of the facts set out Property. example, during tual For the MLBP, by expressly “undisputed,” while 1995, players’ baseball strike in 1994 and material,” apparently were “not on the the- generated by revenues sales of MLBP- analysis ory inap- that rule-of-reason was decreased; products licensed after (Salvino propriate. also contended resumed, games strike ended and MLB by documents cited MLBP some of the (See those increased. revenues Salvino objectionable grounds hearsay were foundation, objections Responses and lack MLBP Rule 56.1 Statement that are ¶¶ below).) 45.) (see 44, unmeritorious Part II.A.3. Policing operations relationships Ac- and the between Licensing and
2. MLBP’s governed Clubs have been MLBP tivities three-to-five-year by agency a series of incorporated MLBP was agreements, collectively “Agen- called the (under name then-existing MLB Clubs 1984, cy Agreement.” Agency In Corpo- Major League Baseball Promotion authority Agreement increased MLBP’s ration) subsidiary of wholly-owned aas by giving right subject it the exclusive — Each of the current MLB Clubs MLBE. exceptions limited license names Club —to interest in MLBE and equal owns an products logos for use on retail Prior to the equally profits. shares (ie., merely national and international MLBP in there had formation of ¶ (See local) 17.) id. In distribution. licens- been no centralized source for the Agency Agreement expanded further ing Property, of MLB Intellectual a fact authority, granting MLBP’s exclu- by potential cited to MLBP licen- was right (again exceptions) sive with limited sees as the reason for baseball’s exclusion logos license names and for use on Club (See marketing programs. certain from products to be sold at retail within the to MLBP Rule 56.1 Response Salvino (See respective local markets. id. Clubs’ ¶ 20.) at a De- example, For Statement ¶ 18.) Thus, since the retail sale of meeting cember 1966 of the executive com- any products bearing an MLB Club’s directors, rep- mittee of MLBP’s board of MLBP, logos name or must be licensed Company resentatives of the Coca-Cola if at a even sold conces- under-the-cap described a football-related sion stand inside the Club’s stadium. begun had three promotion Coca-Cola until From 1966 MLBP had relied represen- years earlier with the NFL. Licensing Corporation on the of America been tatives stated Coca-Cola had (“LCA”) subagent as its to license MLB us- unwilling promotion to consider such LCA, however, Property. Intellectual also ing logos baseball team because MLB’s property marketed the of a intellectual “ structure, basis, ‘en- on nationwide including groups, number of other ” (Id. ¶ 22.) tirely Ac- too cumbersome.’ And, addition, NHL NHL and teams. cording meeting, to the minutes of that Communications, as a division of Warner representatives stated that Coca-Cola be- relating property LCA licensed intellectual willing under-the-cap came to consider an comic book char- to numerous cartoon and promotion using Proper- MLB Intellectual (See Responses acters. ty company once the learned that 24.) ¶¶23, Rule 56.1 Statement *8 entity an creating Clubs were could grant li- right when MLBP’s exclusive negotiate agreement on behalf of all of for use of the Clubs’ intellectual censes the Clubs. products expanded property on retail given in When created MLBP was respective local encompass the Clubs’ (a) right pro- the exclusive to market and markets, grant MLBP ceased to licenses Major logo mote the official name and through began licensing and MLB LCA (b) Baseball, (See League right a non-exclusive directly. id. Property Intellectual ¶ 25.) logos to license the names and of the Na- year, In that total revenues from (c) the Leagues, Proper- tional and American and MLBP licensing Intellectual doubled; proposals for right licensing ty to submit more than and between Janu- 24, 1988, 1, 1987, approv- ary Club marks to the Clubs for their and October MLBP (See its licensees from Response al. Salvino to MLBP Rule increased the number of ¶ ¶¶ 28.) 16.) (See By August 100 to id. 56.1 Statement Since MLBP’s Statement, educational, fantasy, or filed Rule 56.1 Club’s cruises it when camps. li- summer outstanding more than 300 had MLBP 4,000 of some production for the censes Agreement, MLBP is Agency Under for retail sale products different alia, for, protecting inter responsible also bearing reflecting or MLB United States licensing logos and trademarks owned (see ¶35), id. Property Intellectual Clubs, logo the MLB such as the “SF” to some 170 licensees had issued licenses Giants, protect- Francisco San to be sold outside of the products for such licensing logos and trademarks ing and ¶ (see 36). id. United States itself, by the and MLBP such owned BOC “Major League as the Baseball” word Operat- and the Agency Agreement The mark, logos, Series and the World incorporated that are ing Guidelines (See logo. famous silhouetted batter Salvi- grant free to licenses with leave the Clubs Response no to MLBP Rule 56.1 State- intellectual property their own respect to ¶ 3.) Agency Agreement pro- The ment example, For a Club to a limited extent. that, of the vides as the exclusive licensor to issue licenses for the use is allowed property Clubs’ intellectual for use on products on that it property its intellectual retail, guar- MLBP products be sold away game; at a home intellectual gives antees to the Clubs that all licenses will visiting of the Club such property impose quality and will enhance controls game may “giveaway” also be used on the MLB, image and that MLBP will visiting of the product approval with the protect preserve prop- the intellectual (See Responses and MLBP. Salvino Club erty goodwill of the Clubs and the ¶¶ 14.) Rule 56.1 Statement MLBP represents. that property approval No other license or MLBP Infringing parties often use the trade- long as giveaways for such so required Clubs, multiple marks of with the result include the marks of another they do not that more than one Club’s intellectual (See id.) Club, MLBP, or the BOC. MLB property rights infringed simulta- addition, may use a Club its own (See neously. Response to MLBP ¶ others to use its marks to 66.) marks or license Rule 56.1 Statement As central- indi- create home video about the agent, ized MLBP is able to iden- Club, given away vidual to be sold or tify partic- from its own records whether terri- broadcasting within the Club’s home product bearing ular MLB Intellectual (as tory Oper- for each Club defined Property is licensed and thus to determine Guidelines). MLBP licenses the use ating efficiently infringes not it whether or ¶ (See 71.) marks for use in such of BOC and MLBP Property. MLB Intellectual id. request protect property, home videos Club. In order to provide Guidelines also to be sent more than 100 Operating sends causes (See every year. the use of its marks on cease-and-desist letters may Club license ¶ 67.) id. dogs hot and similar items distributed or *9 broadcasting sold within its home territo- MLBP 3. The Market in Which Li- authority li-
ry; grant MLBP has no to Compete censes obtaining censes for such items without view, the A has prior approval. Club’s Club also the which MLBP asserted Salvino view,” the right, broadcasting self-serving within its home “a that oth- criticized as NBA, territory, leagues to use as the the sports to use and license others er such NFL, NHL, the Nation- promote marks to advertise and and Women’s 101.) ¶ Salvino, Association, which had had total sales as well as non- al Basketball 1997, developed of less than million in purveyors such as $1 entertainment sports spring the Bammer in the had Disney, among 1998 and and Nickelodeon in revenues of million from the sale of competitors $17 MLBP’s 1998; 1999, prod- retail Bammers in had for use on Salvino property intellectual ¶¶ (See (See million. id. Responses to MLBP revenues $80 ucts. Salvino ¶¶ 52.) For exam- Rule 56.1 Statement 101,102.) Beans, competitor Salvino
ple, Team In a September marketing plan for MLB Intellectual that obtained licenses MLBP, that Salvino submitted to Salvino plush MLBP for use on Property from stated that it had sold Bammers licensed to use trademarks toys, also held licenses sports organizations, the above as well licensors, including variety from a of other Bammers, “Muhammad Ali” Ice Bam- as NHL, NFL, Olympics, mers, Bammers, and Basketball and vari- Association, Players’ and NASCAR. MLB individually ous other licensed Bammers. ¶ (See 57.) id. Seeking an MLBP license for MLB Intel- Property photo for lectual for use on a ball study A market research conducted bat, MLBP, increasing photo pro- and Salvino stated that it goals included whose audiences, attendance, those in the tar- posed media and to sell items same game it Property, get Intellectual found market which sold Bammers. sales of MLB (See just compete Response with Salvino to MLBP Rule 56.1 that baseball does ¶ 107.) sports. It Statement Salvino described its sport, one or even with target arena for base- market as retailers that have the found that the “ potential carry “sports prod- and enter- licensed range ball is ‘a wide of leisure (Id.) target primary ucts.” Salvino stated that its options vary tainment with (Salvino targets included stadium concessionaires group lifestyle.’” Response and ¶ 55.) goods retailers and that its sporting Rule 56.1 to MLBP Statement Thus, of li- secondary targets 1996 Business Plans’ list were “retailers the MLBP major sport products capac- censed who have the competitors of MLBP’s intellec- volume”; ity the follow- stated property licensing purchase tual included “ comes important competition manufacturers ‘our most ing: apparel branded such Russell, currently Nike, Reebok, Big companies from distribute Champion, Fear; products. These Dog, sports sports other entities licensed and No NBA, NFL, NHL, directly space limited shelf compete such as the ” (Id.) NASCAR, product category.’ this collegiate groups, and the 1996 devoted to entities, such as Olympics; Summer Thus, selling its Bammers addition to Disney, that offered Warner Brothers concession- to MLB Clubs stadium property intellectual relat- licenses use (see Rule Response aires Salvino to, Tunes, Looney Rangers, Power ing e.g., ¶ 112), Bam- Salvino sold 56.1 Statement Peanuts, Nickelodeon, Batman, SpaceJam, “hobby shops, sports collectible mers ¶ (See 56.) Goosebumps. id. and retail chains” shops, Hallmark stores ¶ (id. 111). Salvino, presi- Rick Salvino’s itself sold Bammers Salvino Bam- others, testified that by, among dent since were licensed in the Association, everything Players’ Proper- competed NFL mers MLB ¶¶ 113): (see (“NFL ties, space id. and the store for shelf “ Properties”), Inc. (See Anybody in ‘Everybody competitor. is a Players’ Association. NHL *10 product is a com- gift Rule store sells Response to MLBP 56.1 Statement mine, asserted, fighting because we’re all petitor meaning- of also without disagreement Salvino, ful from that other space, for store for that for shelf professional sports MLB, groups, ¶ like em- 114.) (Id. Wayne Salvi- matter ploy marketing centralized entities. For no, president vice from at least Salvino’s example, dispute Salvino did not that the early 1989 until December testified Association, Players’ MLB the union that competed with oth- that Salvino numerous represents MLB players, states that it is items, plush of producers er well as title, the exclusive right, holder all produces sports ‘“anybody who licensed names, group licensing interest anybody produces, you who products; nicknames, likenesses, signatures collectibles, know, signed products, memo- any group of three or more active MLB rabilia; anybody produces who licensed (See players. Salvino Response to MLBP chains, key pulls, key zipper non-licensed ¶ 4.) Rule 56.1 Statement Nor did Salvino ” ¶¶ (Id. 116.) chains, pulls.’ zipper that, dispute according respective Similarly, in presentations its sales to the (a) licenses, standard Properties NFL has Association, Players’ Proper- MLB NFL right the exclusive to license for commer- (“NBA ties, Properties, and NBA Inc. cial purposes the trademarks of the NFL Properties”), stated that mar- (b) teams; and its Proper- member NBA sports ket for Bammers licensed those ties has the exclusive right to license for “ purposes commercial the use ‘sports would of certain organizations be col- ” names, logos, symbols, emblems, designs, ¶¶ (Id. 117, 118, hobby’ market. lectibles uniforms, etc., NBA, along 119.) proposal Players’ In its to the MLB names, nicknames, photographs, like- Association, example, it stated that “ nesses, signatures, and other identifiable additional market which would ‘[a]n (c) features of current NBA players; and for distribution targeted gen- would be the (“NHL Enterprises, NHL L.P. Enterpris- eral collectibles market. This market es”), has right the exclusive to license for stores, represented gift thousands of purposes names, commercial nick- stores, major stores, specialty department names, colors, logos, designs, and uniform catalogs, and other forms of direct market- etc., NHL, of the member teams of the ing through currently the mass media that appearing numbers players’ NHL uni- ” (Id. category product.’ market this forms, name, initials, insignia, and oth- ¶ 117.) The plan business that Salvino itself, er indicia of the NHL and the name Properties submitted to NFL described (See Stanley and likeness of the Cup. id. Salvino’s falling Bammers as within the ¶¶ 5, 6,7.) “ ” (Id. ‘novelty and memorabilia market.’ Wayne deposition Salvino testified at his ¶ 118.) plan in the And it submitted to advantage that one to Salvino of the Properties, NBA Salvino stated that its NFL’s centralized structure was Bammers, products, including were both that NFL Properties offered a package of “ ” ‘sports hobby’ collectibles market players certain logos, and all team allowing “ ” (Id. “ ” ‘general and the retail market.’ entity ‘one-stop shop.’ serve as a ¶ 119.) Salvino’s Bammers brochure de- (Salvino Response to MLBP Rule 56.1 “ clared Bammers to be ‘America’s Num- ¶ 49.) Statement ” Sports ber 1 Collectible’ with respect 4. The Respective Views Parties’ Bammers, product entire line of e.g., Economists baseball, football, basketball, boxing, ice (Id. skating, hockey, and NASCAR. Toward the discovery period, end deposition MLBP had taken the of Salvi- ¶ 120.) *11 economist, Guth, pointed Fisher out that customers “[t]he A. who Louis expert no’s Property pro- MLB Intellectual opined [for] in which he report a prepared had that spective licensees use MLB Intellec- an “economic car- functions as that MLBP (Fisher Property products.” tual to sell Louis A. Guth dat- Report of (Expert tel” ¶ 8.) ¶ Report Although suggested Guth had (“Guth 6; Report”), February ed could the relevant market be deter- ¶¶ 17-19). see, Report The Guth e.g., id. by conducting survey mined a to ascertain quite likely exercises that “MLBP stated product preferences whether the of con- licenses for pricing control over sufficient responsive sumers were to retail var- toys simi- plush marks for and use of club iations, that “it important Fisher stated is these constitute lar so to be clear that the relevant customers for ¶ (Id. 23.) In depo- his relevant market.” Property pro- Intellectual are the MLB greater in de- testimony, discussed sition spective property licensees of intellectual below, in Part Guth stated tail II.C.4.C. and it is their demand and the alternatives output prices and sets that MLBP limits face that determine the they bound- (see Guth, of Louis A. generally Deposition ¶ (id. (em- aries of the relevant market” (“Guth 140), Dep.”), at March phases original)). “The demand of ulti- licensing of MLB opined he that efficient goods plush mate such consumers as could be accom- Property Intellectual toys property ... that use intellectual ... use of restrictive plished through the less such demand in- is relevant because (see 78-79). He testified alternatives id. demand of direct cus- fluences the derived market could be deter- the relevant (Id.) tomers, the licensees.” a “discrete choice by conducting mined Fisher stated that to these “[available survey” of consumers to determine wheth- [i.e., potential customers licensees] prod- of various changes prices er li- array property of intellectual wide product affect the consumers’ ucts would censors, ranging sports from the different (id. 25-27); however, Guth preferences leagues, companies to entertainment like studies of empirical had conducted no Disney, clothing Warner Brothers (see 23-24, 34-36, 46, 50, 137- kind id. at Tommy like Klein and designers Calvin 38). (Fisher Report name a few.” Hilfiger, to MLBP, support of its motion for sum- ¶ 8.) opined competes He that MLB with April mary judgment, presented entities, in- numerous other entertainment economist, Pro- expert of its report NHL, NBA, NFL, cluding the (“Fisher Re- fessor Franklin M. Fisher NASCAR, Major League as well as Soc- functions and port”), analyzing MLBP’s Association, cer, Golfers the Professional market within which MLBP product Association, the Ladies Professional Golf the views of Guth. operates, disputing Professionals, of Tennis the Association alia, that MLBP is opined, Fisher inter television Olympics, pictures, motion a cartel and should instead be viewed programming, and host and radio venture; joint prod- that the relevant producers sports other and entertainment very at the least of licensing uct market consists to the of intellectual respect (See all and entertainment id. sports products. licenses for for retail property ¶ 15.) just rather than relevant anti- property, “[t]he intellectual He stated Property; competes and that the MLBP MLB Intellectual trust market which market for the Proper- of MLB Intellectual the worldwide centralization produc- for use in the property functions in intellectual ty licensing and other services”; but goods tion of consumer procompetitive efficiencies. produces *12 market were defined “as of parts among even if the constituent and a cartel property of the intellectual stems, competitors part, in from the de- sports certain entertain- related gree integration among the constitu- in power MLBP lacks this products,” ment parts ent organization. of the Where ¶ (Id. 10.) market. relevant parts organization constituent an are highly integrated interdependent, it market, relevant Fisher Within appropriate organization is to view the interdependence of the opined way joint Only as a MLB and the in which MLBP venture. where the Clubs that MLBP a operates reveal functions as organization constituent members of an venture, joint not a cartel: are not highly integrated, but are inde- pendent power sources of economic Despite Mr. Guth’s assertion to the con- Rather, trary, MLBP is not a cartel. respect to the business of entity, joint venture. Mr. functions as Guth could it appropriate to view the or- that MLBP bases his conclusion is ganization as a cartel. that a cartel on the observation cartel ¶¶ (Fisher (footnotes Report omit- authority many
would seek over ted) added).) Here, (emphases the Clubs over which MLBP same activities has interdependent, are even in relation to However, authority. as Mr. ac- Guth Property: MLB Intellectual knowledged deposition, at his this obser- (or vation his characterization of MLBP value of MLB Proper- [T]he Intellectual “cartel”) an as a is insufficient basis for ty large is derived in part from the value acting is concluding anti- of the MLB Entertainment Product cre- competitively. legiti- This is because jointly by Major ated League Baseball. joint need to mate ventures have control result, As a the popularity, and hence very activities identified Mr. over power, economic of particular Club Here, necessary such control is Guth. from, on, stems dependent league order for the Clubs and the as a Club’s membership MLB and the compete adequately against whole marketing efforts MLB. For example, sports other and entertainment prod- no matter how successful the Yankees The MLB jointly produce ucts. Clubs been, have the Yankees marks would product jointly their create and en- have little value over time if the Yankees hance the value MLB Intellectual longer no competed with other Clubs and, Property. entirely It natural Major League Indeed, Baseball. indeed, procompetitive they should drop in popularity of former Club exploit together that value .... names, such Washington as the Sena- report 22. Mr. Guth states his tors, 45s, the Houston Colt and the St. independent otherwise firms become Browns, Louis demonstrates this fact. “members of a cartel [and choose to] trademarks, dress, individual trade forego individual benefits [or inde- marks, service and other intellectual pendence] in order to reduce competi- property that make up MLB Intellectual contrast, among tion the members.” By Property would have little or no value in joint venture group consists a the absence of their association with the interdependent that could not oth- firms Thus, MLB Entertainment Product. erwise In- productively. function deed, unlike a important collection of otherwise indepen- difference between a legitimate joint comprised join venture dent firms that together [sic ] to form an (See cartel, lationships with the licensees. id. MLB Clubs anticompetitive ¶¶ 52.) Among efficiencies ben- highly interdependent. *13 availability of efiting licensees ¶ (Id. 24.) “one-stop shopping,” for no individual further that a cartel would Fisher noted grant could a license to use the Club by charging profits to maximize its seek property intellectual of another Club or licensees and low high prices to some BOC; contrast, or of MLBP others, depending on the ease prices to any grant MLBP can license for particular licensee could sub- with which combination, one, any or all of product another for that offered stitute property. those entities’ intellectual MLBP, that pointed the cartel. He out ¶ (Id. 32.) that Fisher stated contrast, royalty percent- sets a standard one-stop shopping, the absence of [i]n given age product using type for a would incur substantial addi- licensees property, irrespective intellectual Club’s costs; some, tional transaction these re- popularity in the Clubs’ variations sufficiently (See additional costs would be respective flected fan bases. ¶ 29.) large prevent so as to the licensees from Report Fisher producing some or all of the MLB-relat- context, important it is to note In this they currently produce. that products ed Major League that Baseball fans are incur greater expenses Clubs would also loyalty on their to a separable based personnel in the form of additional costs situation, In this a mo- particular Club. licensing handle the added functions nopoly surely sepa- or cartel would set they currently rely on MLBP for which royalty profits. rates to maximize rate and centralized administration. Guth, Contrary to the assertions of Mr. Thus, one-stop shopping absence very that MLBP does not do fact may output well reduce in the markets competition this indicates that it faces compete. those licensees which and products other entertainment from not a cartel. ¶ omitted) (Id. (footnote (emphasis add- ¶ added).) ed).) (Id. addition, concluded, In (emphasis consequence, he output,” while “a cartel serves to decrease one-stop shopping helps broaden the increased, MLBP had instead not de- product offerings of MLB Intellectual creased, of MLB-licensed the retail sales products to include Property, both ¶ (Id. 27.) products. consumer Fisher require property the use of intellectual noted that MLBP records showed business of all 30 MLB as well as to include Clubs MLBP, “[pjrior creation of normally product lines that Clubs would develop- MLB had limited commercial money develop or li- spend protection ment and of its intellectual it has centralized con- cense. Because (Id.) property.” licenses, product all consumer trol over can ensure that MLB Intellectu- opined Fisher the Clubs’ use MLBP Property is licensed for use on a MLBP numerous efficiencies al “aehieve[s] array products. of consumer procompetitive and benefits that would broad years, li- this has meant managed not exist if each Club Over indepen- MLBP has licensed MLB Intellectual property censed its intellectual ¶ 31.) (Fisher such as dently.” Report Property For for use Clubs, apparel, and example, benefiting games, video women’s the difficulties signs goods. licenses on their household Given negotiates licensing and day-to-day product re- associated with manages behalf and administration, MLBP, rates, royalty perform absent it is un- its own its own control, likely that the Clubs would ensure such quality and MLBP would be re offering. product enforcement, sponsible only broad maintain ing royalty a centralized database rates ¶ 37.) {Id. payments, acting essentially aas opined that centralization of Fisher also prospective referral service for licensees. Property licensing MLB Intellectual tasks ¶ (See 76.) Report Fisher Fisher stated quali- in MLBP also creates efficiencies in centralized ty protection and in the effective control *14 simplifies of determining task example, trademarks. For Clubs’ whether a potentially infringing product [s]tate, federal and international laws by is in fact licensed MLBP or the require police trademark owners to Responsible Clubs. product retail in enforce their marks order to retain licensing, MLBP knows from its own The centralization of MLB Intel- them. history records and or whether not licensing Property lectual enables particular product is licensed. In the MLBP to undertake extensive enforce- apparent by “but-for” world envisioned ment activities that the individual Clubs Guth, Mr. where MLBP would retain capacity not have the to under- would functions, only certain of its MLBP protect take if left to their intellectual would either need to track all licenses their own. If the property o[]n Clubs by any entered into or to contact Club protect could not all of their intellectual every Club order to determine wheth- some, they losing risk if property, would er products bearing Club marks are li- deal, great rights. of those More- censed or significantly counterfeit. This over, rights protected, if those were not adds to the cost of In enforcement. rights the licenses for those would have addition, ignores Mr. scenario Guth’s value, much if value at all. less that time is often of the essence when ¶ ¶ (Fisher 38; (pro also id. Report see dealing activities, with enforcement Property of MLB Intellectual tection there respond is often a need to against infringers also benefits MLBP’s immediately to a call complaint or about licensees, who would otherwise fear that goods. counterfeit promotional their efforts would be eroded ¶ (Id. 42.) competition unfair from counterfeit).) Having were or unlicensed Further, control, to quality Fisher carry out the enforcement function maintains that centralization licensing multiplicity overlapping avoids a efforts MLBP benefits the MLB In licensees of to, example, register the 30 Clubs Property they are, tellectual because inter all country of their trademarks in each in alia, able to obtain necessary quality which property might such intellectual source, approvals single from a rather than used, respective and enforce their intellec having to approvals myriad obtain from property rights throughout tual the United centers, separate control including from (See States and around the world. id. may some Clubs that take lengthy periods ¶¶ 43.) (See respond. of time to Report Fisher ¶ 49.) addition, Fisher took issue with Guth’s less-re can licensees be confi hypothesis strictive-alternatives dent that all MLBP licensees will be held —referred standard, as a “but-for” world—in which thereby Guth the same eliminating proposed that each of the possibility competitors 30 Clubs would the who are negotiate licensing agreements, its own quality-oriented set less will free-ride on the and, consequently, so too would increase of licensees who investments efforts id.) recoup these (See royalty rates needed to Centralized conscientious. are Indeed, force higher costs would costs. the Clubs monitoring also benefits quality royalty rates to either raise Clubs a uniform it assures because and MLB not to license certain simply decide ap that will reflect of excellence standard covering concern for products out of Major League image on propriately costs. of the MLB Clubs. and each Baseball ¶ 46.)
(See ¶¶ 50.) ¶ (Fisher 31; id. id. Report see also Fisher, Finally, opined MLBP for Fisher also because use of According to Property Intellectual other the value of MLB provides also centralized of the MLB dependent popularity efficiencies, and creative. administrative Product, popularity Entertainment having developed substantial example, For Product de- the MLB Entertainment product how well various expertise as to integrated in turn on the efforts pends market- succeed likely lines *15 Clubs, li- of centralized time the the absence substantial spends MLBP place, various occurrences censing could lead to help to them with its licensees working refer to as the “free- how of what economists and determine products new develop i.e., entity’s cashing in problem, rider” one existing products. market best ¶ 52.) example, For if (See on the efforts of another. Report Centralization Fisher directly, a granted the licenses Club necessity for each of Clubs avoids the in MLBP of its on-field popular that was because the time spend individual Clubs the 30 popularity in even success could cash on needed to devel- money that would be and obviously could not though its victories marketing expertise own sales and op its partic- the have been achieved without marketing and provide in sales order grant- if a of other Or Club ipation Clubs. of Club intellectual support to licensees ¶ 58.) (See entity logo to use its ed a license to one The use of id. property. granted such product a certain and report repository where licensees central entity competing for a license to a royalties also avoids pay sales licen- one of the product, main- develop same need for each Club of that promotion in the well as sees invested system, collection tain its own licensee would non-promoting product, varied re- to learn the need for licensees licen- on the conscientious likely gain sales based requirements that would porting ¶¶ (See 67- Report Fisher rates for each see’s efforts. by royalty different entailed 70.) multiple track of the keep and to Club that use
royalties required that Guth’s view Fisher concluded ¶ (See 60.) mark. id. more than one roy- their own Clubs should set individual rates, allowing pop- the more thereby alty efficiencies that all of the opines Fisher than the less higher rates in of ular Clubs to set by the centralization MLBP gained Clubs, interdepen- enforcement, ignored monitoring, popular licensing, providing in the MLB of the Clubs respect administrative dence functions the need for Product and Entertainment Property MLB Intellectual balance, which reflects competitive directly savings into cost translate to com- and, equality opportunity expected licensees passed can be on to Competi- on the field. turn, pete prevail mer- of MLBP licensed consumers the fans’ also relates to tive balance If were to handle these chandise. Clubs poten- team is a that each expectations would separately, their costs functions champion tial that each Club has a be more general consistent with a increase —i.e. opportunity to win each in consumer reasonable interest in licensed retail mer- ¶ (Guth (em- game compete champi- and also to for a chandise of all sorts” Decl. added)), onship. phasis and then stated that MLBP’s increase in “may revenues well ¶ (Fisher 14.) “Mr. Guth’s Report pre- demand,” higher might not reflect but in- royalties ferred distribution of higher prices resulting stead reflect from would foster a imbalance “an overall out in demand for such popular team shift over-compensating (id. (first emphasis origi- merchandise” ¶ (Id. 81.) joint of all efforts Clubs.” nal; ours)). emphasis second resulting “ultimately imbalance would by leading harm all to a less inter- Clubs attempting Instead of to show that there Product, esting MLB Entertainment which genuine fact, were disputes of material would make it difficult for MLB to com- position Salvino took the that MLBP’s fac- pete against sports other and entertain- evidence, tual submitted in support of rule- (Id.) products.” ment analysis, of-reason largely irrelevant. court, urged It applying instead of Salvino, opposition to MLBP’s sum- reason, rule of to apply per se or motion, mary judgment submitted rebut- “quick-look” liability. standard report tal and declaration Guth re- (see sponse to the Report Expert Fisher C. The Decision the District Court Report Rebuttal of Louis A. Guth dated *16 (“Guth 8,May 2003 Report”); Opinion Rebuttal an and Order dated Novem- 16, 2005, Sep- reported Declaration of Louis A. Guth dated ber F.Supp.2d at 420 (“Guth 22, 212, Decl.”)), tember granted 2003 reiterat- the district court MLBP’s ing views set out in the initial Report summary judgment Guth motion for dismissing ¶¶ 6). (see, 2, e.g., argued § Guth Decl. 1 Guth Salvino’s counterclaim. The court not- procompetitive the efficiencies and ef- ed that on a summary judg- motion for ment, fects that the Report opined moving Fisher result- once the party proffered has ed from centralization of MLB Intellectual facts to show that there genuine is no issue Property licensing in any MLBP could be as to material fact and that party (See, by law, achieved judgment less restrictive means. is entitled to aas matter of ¶¶ 8-18.) e.g., id. opposing party “the present ‘specific must showing genuine facts there is a [that] presented Salvino no factual evidence to trial.’” F.Supp.2d issue for 420 at 218 refute the evidence cited MLBP’s sum- 56(e)). (quoting Fed.R.Civ.P. non- “[T]he mary judgment motion. For example, moving party ‘may rely conclusory not posited while Salvino increased allegations specula- or unsubstantiated licensing by MLBP simply by was caused ” F.Supp.2d (quoting tion.’ 420 at 218 (see, a boom in e.g., consumer demand (2d Almenas, v. Scotto 143 F.3d Responses to MLBP Rule 56.1 Cir.1998)). ¶¶ 34-36), citing paragraph Statement 4 of Declaration, substance, Guth the Declaration cited As a matter of the court be- facts, causation, no not opine did as to gan rejecting Salvino’s contentions that equivocal as to whether there operations had of MLBP as centralized even been such an increase in illegal per demand. licensor should be ruled It se. paragraph That in- stated noted that illegal per “[f]or conduct to be se, creases in the number granted of licenses it must fall range within the narrow years MLBP over the appear “would to behavior that plainly is considered so anti- with even rudimenta- redeeming observer lacking “[if] and so competitive could ry understanding economics presumed that it is value pro-competitive ques- arrangements that the conclude further examination.” without illegal anticompetitive have an effect (internal tion would quotation marks at 219 F.Supp.2d ... and markets.” The on customers omitted). fixing, such as “Restraints analysis day carries “quick-look divisions, arrangements, tying market anticompeti- great when the likelihood to be all been found boycotts have group easily can be ascertained.” tive effects themselves.” Id. in and of unreasonable however, appropriate, ... It omitted). (internal The marks quotation effects of an anticompetitive where the Supreme noted district court [the are not obvious or agreement Music, Inc. v. Colum in Broadcast Court may procompeti- “have a net agreement] Inc., 441 U.S. Broadcasting System, bia effect, possibly no effect at all on tive (1979) 60 L.Ed.2d 99 S.Ct. competition.” (“Broadcast ”), that the had “found Music licensing arrange blanket [defendants’] Dental (quoting Id. at 220 California because it se unlawful per ment was not FTC, 756, 770, 771, 119 Ass’n v. 526 U.S. trade with o[f] a naked [restraint]
was ‘not
(1999)).
Barr Laboratories 386 F.3d Co., Inc. v. Walker Manufacturing 61 F.3d (2d Cir.2004)). 129) (other quotation internal marks omitted). However, The court found that the court Salvino had not found that Salvino had also failed to met its initial burden under adduce evi- rule-of-reason analysis, dence as to MLBP’s market noting power first or the Salvino had market, rejected relevant and it pointed to no evidence Salvino’s to indicate that *18 contention that such licensing authority MLBP’s evidence was not re- had an ad- quired: verse effect on competition:
The mere fact that Salvino did not argues re Salvino that a showing of market ceive an MLBP license for its power unnecessary Bammers is ... and dismisses is not sufficient. [K.M.B. Warehouse as immaterial MLBP’s attempts to de- Distributors, Inc. v. Walker fine the relevant market.... Salvino Manufac Co., (2d 123, turing 61 F.3d 127 Cir. cannot escape its burden of demonstrat- 1995) (explaining plaintiff “the ing ] must MLBP’s power light market in of its just show more than that he was harmed inability to an demonstrate actual ad- conduct”). by defendants’ Salvino has verse competition.... effect on any not offered evidence of an adverse Court that Salvino has finds failed effect on competition resulting from any evidence MLBP’s actual offer Indeed, licensing authority. MLBP’s adverse on the market or its effect suffi- respond Salvino did not to MLBP’s ar- power. Accordingly, cient market Salvi-
309 Summary Judgment Principles under the rule of A. demonstrate no cannot places that MLBP unreasonable reason Summary is judgment appropriate when motion for on trade. MLBP’s restraints pleadings and admissible evidence § 1 summary on Salvino’s judgment proffered to the district court show that granted. Act claim Sherman is genuine there is “no issue as to mate- added). rial fact and is moving party F.Supp.2d (emphasis at 221 420 law,” to a as a judgment entitled matter of judgment A was entered consent 56(c). ruling Fed.R.Civ.P. In on a motion 2006, alia, reflecting, inter the dis- March summary judgment, district court all of claims and Salvi- missal of Salvino’s “ may rely ‘any on material that would be appeal right no’s reservation ” admissible or usable trial.’ v. Azrielli summary dismissing entry judgment (2d 512, Offices, Cohen Law 21 F.3d 517 § 1 of antitrust counterclaim under Cir.1994) (quoting Wright 10A C. A.& Act. Sherman Miller, Federal Practice Procedure: (2d ed.1983)); see, § 2721 at e.g., Civil 40 II. DISCUSSION Co., (2d Wyatt Raskin v. 125 F.3d 66 appeal, contends that Cir.1997). On Salvino determining In whether ruling court erred in that the the district moving party judgment is entitled in MLBP of the centralization law, matter of the court must resolve all for use on re Property MLB Intellectual ambiguities justifiable all and draw factual analyzed tail is to under the party against inferences favor of the principally rule of reason. Salvino adheres See, summary judgment sought. whom contention on which relied in the Inc., Liberty Anderson v. e.g., Lobby, 477 court, ie., operations district MLBP’s 255, 106 91 U.S. S.Ct. L.Ed.2d only under a should be evaluated stricter (1986). per standard —either the se standard or summary We review a district court’s “quick-look” standard —and that under judgment ensure,” novo decision de “to standards, summary judg those stricter case, antitrust “that substantive inappropriate. support ment was correctly applied.” Tops antitrust law was contention, it this characterizes Clubs’ Markets, Markets, Inc., Quality Inc. v. agreement to make MLBP their exclusive (2d Cir.1998). Summary judg F.3d as “naked licensor horizontal importance particular ment is of in the traditionally output restrictions fall [that] law, because it helps area antitrust (Salvi- per within the se proscriptions.” [ ] prevent “avoid wasteful trials and [] [] 20.) no on appeal brief may chilling lengthy litigation that have a
Given what refers to as market pro-competitive effect forces.” Id.; see “price” fixing profit sharing by Corp. fact also Bell Atlantic v. Twom (see 1955, 1966, bly, Part S.Ct. interdependent entities II.C.2. U.S. *19 (2007) below), and of (reversing that Salvino adduced no evi- L.Ed.2d 929 denial any agreement complaint pur dence of reduction of or to motion to dismiss antitrust 12(b)(6) (see below), “output” stating II.C.l. to reduce Part Fed.R.Civ.P. suant conclude, follow, complaint, we for the that “when the in a allegations reasons true, of applied district court could not raise a claim properly however relief, deficiency this basic rule-of-reason standard and under entitlement to any point ... at of exposed standard failed show should money genuine expenditure issues to be tried. minimum time and 310 (internal and the court” parties gations of the party defending against omitted)). summary motion, marks
quotation judgment drawing all favor,
reasonable
inferences
his
... con
Facts,
Knowledge,
Personal
and Ex-
clusory statements, conjecture,
specula
or
pert Opinions
by the party resisting
tion
the motion will
not defeat summary judgment.”); ITC Ltd.
summary judgment
motion is
Where
Inc.,
(2d
135,
v. Punchgini,
482 F.3d
151
affidavits,
opposed by
supported
those
Cir.)
statements,
(“conclusory
conjecture,
be made on personal
“affidavits shall
and inadmissible evidence are insufficient
shall set forth such
knowledge,
facts as
denied,
to defeat summary judgment”), cert.
evidence,
would be admissible
and shall
—
—,
288,
U.S.
128 S.Ct.
169
affirmatively that the affiant is com
show
(2007);
L.Ed.2d 38
McPherson v. New
testify to the
petent
matters stated
Education,
City Department
York
457
56(e).
therein.” Fed.R.Civ.P.
‘“[H]ear
(2d
211,
Cir.2006)
F.3d
215 n. 4
(“specula
say testimony ...
that would not be ad
tion alone is
insufficient
defeat a motion
if
to at
trial may
missible
testified
summary
judgment”);
v.
Bickerstaff
56(e)
properly be set forth
Rule
[the
]
”
(2d
435,
College,
Vassal*
196 F.3d
452
Cir.
Beyah
Coughlin,
affidavit.’
v.
789 F.2d
1999) (“Statements that
are devoid of
(2d Cir.1986)
986,
(quoting
989
6 Moore’s
specifics,
conclusions,
replete
but
with
¶ 56.22[1],
Federal Practice
at 56-1312 to
properly
insufficient to defeat a
supported
(2d
see,
ed.1985));
e.g.,
56-1316
Sarno v.
summary judgment.”),
motion for
cert. de
Ives, Inc.,
Douglas Elliman-Gibbons &
nied,
1242,
2688,
530 U.S.
120 S.Ct.
147
(2d
155,
Cir.1999);
183 F.3d
Contem
(2000).
L.Ed.2d 960
Mission,
porary
Inc. v. United States
Service,
(2d
97,
648 F.2d
n. 11
Postal
702,
Under Fed.R.Evid.
an ex
Cir.1981).
witness,
pert
witness,
lay
unlike a
is
properly
In order to defeat a
supported
“permitted wide latitude to
opinions,
offer
motion,
summary judgment
the opposing including those that are not based on
party
proffer
must
admissible
knowledge
evidence
firsthand
or observation.”
specific
forth
facts” showing
“set[s]
a Daubert v. Merrell Dow Pharmaceuti
cals, Inc.,
genuinely disputed
579,
factual
issue that
592,
509 U.S.
113 S.Ct.
applicable
2786,
(1993).
material under the
legal princi
3H
omitted).)
quotation
on
testimony
also
based
‘technical’
marks
offers
to
but
citation, however,
knowledge.
any
See no
to
specialized’
by
and ‘other
statement
702.” Kumho Tire Co.
that centralization
indicating
Fed. Rule Evid.
Guth
of li-
Carmichael,
137, 141,
censing
provide
526 U.S.
not
pro-
v.
MLBP does
(1999).
efficiencies,
interviews asserted were knowledge. The district had firsthand “undisputed,” suggested that the evidence court found in Guth’s assertions no basis support cited to those facts was inadmissi- denying summary judgment, stating for ble, stating that MLBP’s assertions were “conclusorily disagree[d] that Guth with” “not material” and that those assertions Fisher, F.Supp.2d at 220. The district (or them) to support documents.cited court did not err this assessment. hearsay, were speculative, or lacked foun- objections dation. Its implicitly were 2. Local Rule 56.1 by overruled the district court. We see no In aid of the court’s determina- district error. any genuine tion as to whether there exist by Most of the documents cited MLBP material, disputes as to facts that are Rule in support of its Rule 56.1 requires party moving 56.1 assertions are sum- mary judgment to submit a statement Contemporane- of business records. that it the material facts contends are not ous “by, business records made or from genuinely dispute, see Local Rule by, information person transmitted 56.1(a), requires opposing knowledge,” “kept in the course of a party showing a statement which submit of regularly conducted activity” by business moving party’s factual assertions it “regular business whose practice” it was to 56.1(b). disputes, see Local Rule Subsec- records, keep make and such Fed.R.Evid. (c) provides tion of Rule 56.1 803(6), exception are admissible as an paragraph numbered in the [e]aeh state- rule, hearsay see id. The foundation ment of material facts set forth for the admission of the MLBP business required by statement to be served records was laid in several sworn declara- moving party will be deemed to be ad- by tions submitted MLBP with its sum- purposes mitted for of the motion unless mary judgment motion.
specifically controverted a corre- MLBP, For example, citing the minutes numbered
spondingly paragraph in the of a meeting MLB Club required to be owners and an statement served record, MLBP financial opposing party. stated that i.e., year in which MLBP ceased 56.1(c). Local Rule rely on LCA as a subagent purposes 56, respon- Under Rule is the court’s MLB Intellectual Property, sibility to determine whether the opposing MLBP’s total licensing revenue from sales party’s response to the assertion of a ma- bearing MLB Intellectual presents dispute terial fact genu- that is Property more than doubled. Salvino re- generally ine. 10A Wright, See C. A. sponded, “UNDISPUTED that the memos Kane, Miller M. Federal & Practice and and minutes so state. The cited evidence (3d ed.2006). § Procedure at 423 (Salvino hearsay and lacks foundation.” case, present responses Salvino’s Response to MLBP Rule 56.1 Statement Rule 56.1 require to the MLBP Statement ¶ 26.) However, summary MLBP’s judg- questions admissibility attention ment accompanied by, motion was genuineness inter dispute. evidence
alia, the sworn declaration of its Senior Objections Salvino’s to Admissibili- Vice President and General Counsel Ethan ty Declaration”), Orlinsky (“Orlinsky G. stat- Many ing, “of responses personal of Salvino’s to the own knowledge,” [his] Statement, MLBP Rule 56.1 while admit- that those documents were “true and cor- *22 hearsay, specula- The cited evidence main- that were documents copies of rect tion and lacks foundation. These docu- at MLBP. records tained as in the received created ments were (Salvino and/or MLBP Rule 56.1 Response to business, ¶ of MLBP’s ordinary 28.) course in objections These fail Statement MLBP’s standard part retained were Orlinsky Declaration and light of the (Orlinsky Declaration practice” business the document. nature of ¶¶ 21). Hence, 22, 2003, August dated Similarly, response quota- to MLBP’s lacked merit. objections Salvino’s de- a 1984 MLBP memorandum tion from experiences' of scribing early licensing iden- Orlinsky likewise The Declaration stating that predecessor, MLBP and its record an October such a business tified as licensing, Club to centralization of prior from an MLBP vice 24, 1988 memorandum unprotected and had largely marks were MLB Commissioner-elect president value, stated little commercial Salvino Giamatti, summary attaching a status Bart so that the memo it was “UNDISPUTED (“October 24, Summary” or 1988 Status memo, however, hearsay The states. respect to MLBP Summary”) with “Status lacks, (Salvino Response foundation.” achieved since progress and the ¶ 19.) Rule Statement to MLBP 56.1 “[rjetail [l]icensing brought [pjroduct However, summary judgment mo- MLBP’s years after “17 January 1987” ‘in-house’ by the sworn decla- accompanied tion was Licensing Company licensing through] [of Podesta, Joseph L. who had been ration of (Division Communi- of Warner of America from November employee of MLBP (October cations).” Sum- 1988 Status 1985, serving as its until October 2.) stated, Summary mary The Status (See from 1975 to October president alia, January that since inter Joseph L. Podesta dated Declaration of from 100 had increased licensees MLBP’s ¶2.) declaration, 21, 2003, In his August number of licensee and that to 250 president, MLBP’s stated that as Podesta per year. 4 to 36 had increased from audits prepare the memoran- helped had he (See id.) to an assertion response MLBP’s ordinary course of dum “in the Statement, citing MLBP Rule 56.1 helping to purpose of business” for the January Summary, “[b]etween Status Ueberroth, incom- Mr. Peter “educate 24, 1988, in- and October Baseball, about ing Commissioner from number of its licensees creased the MLBP”; history Podes- operations 250,” stated as follows: 100 to Salvino kept a report ... and “signed the ta had documents so UNDISPUTED ¶ (Id. 7.) at MLBP.” copy in files [his] state, Any material. increase but not Orlinsky also Declaration logo large part by was caused the admission provided the foundation prevalent at the licensing boom that was records, including MLBP business time, arrangement, of other pooling not executive minutes of the 1966 MLBP any evi- point and MLBP does representa meeting at which ex- committee came at the dence that increases Company stated tives of the Coca-Cola rivals in a relevant pense ¶ under-the-cap Moreover, company’s earlier that that Decl. 4. market. See Guth had excluded with the NFL promotion to streamline if it is economical even MLB lacked centralized because functions, justify an baseball it does not some above). (see Part I.B.2. licensing capability forego teams agreement MLB hearsay and objected on Although profits Salvino output and to divide their own (see ¶¶ ll.)[ minutes (Id. to these grounds foundation compete. ] than rather 8— to MLBP Response Rule 56.1 admitted all or most of the MLBP asser- *23 ¶ 22), tion. MLBP example, the minutes For Statement themselves asserted that a plainly admissible as business record 1970’s, [i]n the late MLBP began the 803(6). Further, considering under Rule process clearing rights to the description of minutes’ Coca-Cola MLB Club logos other trademarks solely representatives’ proof statements in they various countries so that could executive of .what the MLBP committee be licensed for use on retail products told, that those was we note statements do sold in those countries. hearsay, fall
not
within
definition
see
¶
(MLBP
32.)
Rule
Statement
56.1
Salvi-
801(e).
Fed.R.Evid.
response
no’s
addition to
on
objecting
—in
grounds
by
that the document cited MLBP
Finally,
responses
we note that Salvino’s
proposition
hearsay,
for that
was
specula-
nearly
to
all of MLBP’s Rule 56.1 asser-
tive, and lacked foundation —was as fol-
by
tions were
accompanied
statement
lows:
material,”
that
a
the fact asserted was “not
not
DISPUTED and
material. While
reflecting
characterization
Salvino’s con-
state,
the cited declarations so
if
even
challenged
tention
practice
that the
should
the cited
can
by
economies
be achieved
subject
analy-
not be the
of rule-of-reason
activities,
collectivizing certain
it does
conclude,
sis.
Because we
the reasons
justify
not
agreement by
an
MLB teams
below,
in
discussed
Part II.C.
that the rule
forego
output
to
their own
and to divide
appropriate
provided
analyt-
reason
(See
profits
compete.
rather than
Guth
framework,
materiality objec-
ical
Salvino’s
¶ 8-11.)
Decl.
tion also lacks merit.
(Salvino
to
Response
MLBP Rule 56.1
¶ 32.) Similarly,
Statement
as to MLBP’s
Dispute
4. Genuineness of
years
assertion that
a few
after
“[w]ithin
court, in
While a district
consider
1986, MLBP caused the amount of reve-
ing
summary
judgment,
motion for
is not
generated
nues
by MLB-licensed product
issues,
to
resolve factual
court must
(MLBP
triple”
Rule 56.1 Statement
determine
a Rule
response
whether
56.1
¶ 29),
response,
in
Salvino’s
addition
actuality present
dispute
does
that is making hearsay
objections,
and foundation
genuine.
objection
An
to the admissibility
stated:
of a
equivalent
document is not the
of a
Any
DISPUTED and not material.
contention
the document’s contents
in large part
increase was caused
by the
Thus,
are untrue.
as to the “undisputed”
logo
prevalent
boom
was
MLBP assertions to which Salvino made
time,
the pooling
not
arrange-
objections,
which as noted
the previous
ment, and
does
point
not
rejected,
properly
section were
Salvino’s
evidence that increases came at the ex-
responses
clearly
were
insufficient to show
pense
rivals in a relevant
genuine
tried as to
issue to be
the mat
¶ Moreover,
market.
Decl.
See Guth
ters
described
the documents.
even if it is economical to streamline
functions,
some
justify
does not
addition,
court
district
found that
agreement by MLB teams
forego
Salvino’s
to several
responses
other MLBP
their own output
profits
and to divide
assertions, although commencing with the
¶¶
(Id.
8-11.)
rather than compete.
word “disputed,”
not
dispute
did
evince a
(See
genuine.
was
Those responses
Response
often
to MLBP Rule 56.1
¶ 29.)
were
followed
that in
statements
effect Statement
plaintiffs
re-
antitrust
must demonstrate that
considered these
The district court
certain
similar
contract or combination is
particular
as well as
other
sponses,
in-
anticompetitive
to the substantial
be-
responses relating
fact unreasonable
granted
in the number of licenses
crease
fore it will be found unlawful.” Id.
Property,
MLB Intellectual
however,
are,
There
“certain
genuine.
dispute
a factual
present
practices
which
agreements
because
The court stated
competition
pernicious
effect
*24
dispute
does
MLBP’s stated
Salvino
any redeeming
lack of
virtue are conclu
products
increase
MLBP-licensed
sively presumed to be unreasonable and
licensing authori-
since MLBP took over
illegal
inquiry
therefore
without elaborate
ty
property.
for MLB intellectual
precise
they
as to the
harm
caused or
have
¶¶ 26-36.)
(MLBP 56.1
Salvino
Stmt.
the business excuse for their
North
use.”
only
proffered
takes issue with MLBP’s
States,
Ry.
ern
v. United
356
Co.
Pacific
increase, i.e.,
for
it claims
reasons
1, 5,
514, 2
78
545
U.S.
S.Ct.
L.Ed.2d
product
increase
the “licens-
see,
Khan,
(1958);
e.g.,
v.
522
State Oil Co.
MLBP’s
ing boom” and not
result of
3, 10,
275,
118
B. pa County Society”); also Medical see Act man Products, Creative Inc. v. Leegin Leather — PSKS, Inc., U.S. —, 2705, 127 S.Ct. terms, §
By its 1 of the Sherman (2007) (ver 2717-18, 2725, 168 623 L.Ed.2d “[e]very contract, prohibits Act combina setting agreements tical minimum resale otherwise, in the form trust or tion under rule of analyzed are to be prices conspiracy, of trade or com restraint reason), overruling Dr. Miles Medical Co. among 15 merce the several States.” Co., 373, D. Park v. John & Sons 220 U.S. § 1. “Court has not Supreme U.S.C. (1911). 376, 502 S.Ct. 55 L.Ed. Such language, a literal 31 approach taken this however,” appropriate se treatment recognized “[p]er ‘[o]nee but “has long instead re particular with a kind of Congress experience intended to outlaw un predict Inc. v. enables the Court reasonable restraints.” Texaco straint 5, 1276, con 1, 126 164 that the rule of reason will Dagher, 547 S.Ct. confidence U.S. ” ”) (internal Co., 10, (2006) 522 (“Dagher quo it.’ State Oil U.S. L.Ed.2d demn omitted) County Dagh (quoting Maricopa (emphasis tation marks 118 S.Ct. ). Thus, 344, ap Society, 102 S.Ct. presumptively Medical 457 U.S. er Court “th[e] 2466). analysis, which plies rule reason under
Per se treatment
is not appropri
power and market
designed
structure
ate, however, where the economic and
assess the combination’s actual effect.
challenged prac
effects
Copperweld Corp.
Independence
v.
Tube
justify
tice are unclear.
“To
per
se Corp.,
752, 768,
467 U.S.
104 S.Ct.
prohibition a restraint must have manifest
(1984).
L.Ed.2d 628
effects,
ly anticompetitive
...
lack ...
Under
analysis,
rule-of-reason
”
any redeeming
Leegin
virtue....
Crea
as described originally in Chicago Board of
Products, Inc.,
tive Leather
127 S.Ct. at
States,
Trade v.
United
246 U.S.
(internal
omitted).
quotation
marks
(1918),
S.Ct.
317
T.V.,
Court,
1355; see,
Engineers, the
faced with
e.g., Continental
98 S.Ct.
fessional
Inc.,
36, 49,
society’s
ban on
Sylvania
433
absolute
v.
U.S.
Inc. GTE
(1977) (“Un-
industry
bidding,
ruled that “no elaborate
L.Ed.2d
97 S.Ct.
rule,
analysis
of
weighs
required
[wa]s
factfinder
all
demonstrate
this
der
”).
agree
anticompetitive
a case....
character
such an
circumstances of
692, 98
ment.” 435 U.S. at
S.Ct. 1355.
reason,
plain-
the rule of
Under
The Court reached the same conclusion
an initial burden to demon-
tiffs bear
respect
plan
expressly
to a
limit
challenged behav-
the defendants’
strate
college
games
the number of
football
ed
effect on
ior had
actual adverse
could be
a mini
televised
fixed
competition as a whole
the relevant
games,
mum
those
see National
Because the antitrust
laws
market....
Collegiate Athletic Ass’n v. Board
Re
whole,
competition as a
evidence
protect
Oklahoma,
gents
University
in-
have been harmed as
plaintiffs
85, 109-10, 104 S.Ct.
L.Ed.2d
U.S.
will not
competitors
dividual
suffice....
(“NCAA
(1984)
”),
respect
and with
to a
satisfy their initial bur-
plaintiffs
If the
agreement among
horizontal
dentists
den,
the burden shifts
the defendants
from
particu
“withhold
their customers a
pro-competitive
offer evidence of the
desire[d],”
they
lar service that
Indiana
agreement....
Assum-
effects
Dentists,
Federation
U.S.
proof,
ing
provide
defendants can
such
*26
benefits offered
defendants
[i]n
through
the
for what
come to
have been achieved
less restric-
formed
basis
has
Ultimately,
“quick-look”
factfin-
called
or
tive means....
the
abbreviated
reason,
an
weighing
analysis
must
in a careful
under the rule
engage
der
rudimentary
un-
agree-
of the
effects of the
observer
even
derstanding
could conclude
pro
ment —both
and con—to determine
of economics
question
in
challenged
arrangements
if
effects
restraint
that the
would
promote
destroy
anticompetitive
have an
effect on cus-
competition.
tend to
or
tomers
markets.
Technology
Pharmaceuticals
Geneva
Dental,
770,
Inc.,
119
v. Barr
F.3d
526 U.S. at
Corp.
Laboratories
386
California
(2d
(internal
Cir.2004)
485,
quota-
1604.
506-07
S.Ct.
omitted) (emphasis
original).
marks
tion
analy-
applied quick-look
The Court has
cases,
Supreme
only
has
“to
activities that are so
In a few
Court
sis
business
practice
that courts need
challenged
plainly anticompetitive
ruled that
should
cursory
examination be-
per
neither be held a
se violation
undertake
subjected
imposing
liability.” Dagher,
Act
full-
antitrust
nor be
fore
Sherman
3,
fact
analysis,
rather
at 7 n.
inappropriate.
accepting
propo-
While
tions” Contention
advertising is
price
sitions “that
fundamen-
By “output,” Salvino refers to licenses
and that
price competition”
tal to
“Re-
for the use of the MLB Clubs’ intellectual
ability to
prices
strictions on the
advertise
(See,
property.
e.g., Salvino
Response
normally
it more difficult for
make
con-
¶
(in
MLBP Rule 56.1 Statement
mak-
to find a lower
and for
sumers
den-
licensor,
ing MLBP their exclusive
compete
price,”
tists to
on the basis of
“forego
Clubs
own
id.
output”);
(internal
quota-
U.S.
S.Ct.
¶¶
(same).)
27-43, 47-50, 52-53
But while
omitted),
marks
Court
tion
found that
exclusivity agree-
calls the Clubs’
“any
anticompetitive effects
re-
[these]
ment a
output
“naked
...
]”
restriction
intuitively obvious,”
straints are far from
(Salvino
appeal
6) asserting
brief on
at —
and, therefore,
rule of
“the
reason de-
“express agreement
there is an
thorough enquiry
mands a more
into the
(id.
reduce
at 12
output”
(emphasis add-
restraints,”
consequences of those
id. at
ed))
agreement
and that the
“restricts out-
If an arrangement
than “one owners copyright Although individual more, rath- markets render efficiency and licenses direct grant free remained 19-20, 99 id. at less, competitive,” than er works, organ- of their performance omit- (internal marks quotation S.Ct. izations ted). stated: Supreme Court creating a absolutely reduce[d] costs it, license, as we see The blanket few, only a that is sold license blanket no of trade restrain[t] not a “naked times, thousands, instead stifling competition,” except purpose *30 monitoring closely need obviates inte- accompanies the rather ... but use they do not to see that the networks and en- sales, monitoring, of gration organiza- they pay [The for. than more copy- unauthorized against forcement provide[d] also tions] the necessary re- copyright owners granted organiza- sources for blanket sales and enforce- tions nonexclusive rights to license ment, resources unavailable to the vast performance of their works and re- majority composers and publishing mained free to grant performing rights houses. (2) licenses directly users; the blanket granted by license 21, (footnotes the organizations U.S. was a S.Ct. 1551 omitted). package product that no copy- The Court individual stated right (3) offer; owner could in Broad- costs, substantial lowering
[t]his
Music,
cast
“[i]t was found that
the ar-
which is of course potentially beneficial
rangement actually increased output and
buyers,
both sellers and
differentiates
(Salvino
competition”
facilitated
brief on
the blanket license from individual use
18).
appeal at
Only the first of these
licenses. The blanket
license is com-
provides
factors
distinction,
posed
but it
is a
compositions
individual
plus
distinction that
loses significance
aggregating
Here,
in the
service.
context of the
whole
differences
truly greater
than
between the mu-
the sum of
sic
is,
sports
parts;
industries.
extent,
to some
a differ-
ent product.
Taking the three
factors
reverse or-
21-22,
Id. at
we
some
enough
have
blanket licensing
output
counsel
“increased
and fa-
doubt—
against application of
per
se rule— cilitated competition” finds
support
little
about the extent to which
practice
Supreme
this
opinion.
Court’s
If
“in-
the “central
system
threatens
nervous
creased output,” Salvino means that there
economy,”
is,
...
were in fact more music performance li-
pricing as the free market’s
censes,
means
opinion
squarely contradicts
allocating resources. Not all arrange-
Salvino’s statement. Although “there
among
ments
potential
actual or
com-
practical
[we]re no
impediments prevent-
petitors that have an impact
price
on
ing direct dealing by the television net-
per
are
se violations
the Sherman Act works if
desire[d,
so
they
historically they
or even unreasonable restraints. Merg-
not
Music,
ha[d]
done so.” Broadcast
among
ers
competitors eliminate compe-
12,
U.S. at
Indeed,
different from those here mean- trial, The district after a full ingful respect. § found that plan the NCAA violated 1 of alia, by, the fixing Sherman Act inter the NCAA, In Supreme the Court consid prices particular for telecasts placing and Collegiate the National ered rules of Ath artificial limits on the televising college of (“NCAA”) respect letic Association It football. found that for but the NCAA televising college of games. football plan, college games more football would be The NCAA had entered into contracts with affirmed, televised. The appeals court of Broadcasting American Companies ruling that plan the NCAA constituted (“ABC”) CBS, permitting those net price fixing per and hence illegal. se games, works to broadcast such and had Supreme affirmed, The Court but entered into contract with Turner Broad ruled that plan should have been casting (“TBS”), System, Inc. for the ca se; illegal per held it should have been such blecasting games. of The NCAA did analyzed under rule of reason. The network, any not license other and the Court stated that plan colleges NCAA forbade its member [tjhere can no doubt that the chal- agreements enter into for televising of practices lenged of NCAA constitute games any their any other network or a “restraint of trade” sense that 91-93, NCAA, local station. See 468 U.S. at they limit members’ negoti- freedom to 29, 104 n. S.Ct. 2948. 105 ate and enter into their own television plan The NCAA set absolute maxi sense, however, contracts. In that ev- games mum on the number that could ery trade, contract is a restraint of It “appear be broadcast. also contained repeatedly recognized, we have respect ance limitations” with to each two- Sherman Act was prohibit intended to year period covered the network con only unreasonable restraints of trade. tracts. The number of times that a given NCAA, U.S. S.Ct. 2948. college could have football games tele T.V., Noting Inc., that Continental six, vised was limited to of which no more 51-57, U.S. at 97 S.Ct. indicated than four could nationally. be televised “a restraint a limited aspect of a market Thus, plan the NCAA limited both the may actually competi- enhance marketwide total intercollegiate amount televised tion,” and that squarely “Broadcast Music football of games number joint holds that a selling arrangement may could be televised for one team. See be so efficient that it will increase sellers’ 92-94, 104 generally id. S.Ct. 2948. aggregate output procompeti- and thus be tive,” the NCAA Court stated that per-telecast prices paid the net- [tjhus, despite the fact this ease works to the NCAA were fixed. For ex- involves ability restraints on the ample, the ABC television paid network member institutions compete in terms $600,000 fees of for each of the 12 national price output, a fair evaluation of games it during telecast regular requires character con- season, $426,779 fall each the 46 sideration justifications of the NCAA’s regional telecasts in 1980. Id. 93at n. for the restraints. 104 S.Ct. Except for the dif- NCAA, 103, 104 atU.S. S.Ct. 2948. ferences regional between national and telecasts, the colleges games whose Accordingly, were Supreme pro- Court televised received equal payments analyze ceeded to plan the NCAA under those telecasts. rule doing, reason. so it conclud- *33 to than college that wished have more six unreasonably restrained plan that the ed however, two-year factors within a games few of the of its televised competition; forbidden, con- by period helped, to reach that was rather than on the Court relied respect MLBP, contrast, to Salvi- present by clusion are to do so the NCAA. Clubs; against claim MLBP. the licensing agent no’s for MLB the of it the the their assists Clubs that the Court found Supreme property. intellectual anticompetitive under plan was NCAA because, alia, analysis inter rule-of-reason Further, plan whereas the NCAA “cre- colleges plan deprived the individual that output” by limiting on a limitation ated] for television compete their freedom to of games of the total number televised Rejecting the NCAA’s con- appearances. any college’s the number of times one produced proeompeti- its plan that tention televised, NCAA, 468 could U.S. games be (see below), Part II.C.4.C. tive efficiencies 2948, has not ad- at 104 S.Ct. Salvino that does “[t]he the Court noted NCAA of on the any duced evidence a limitation any selling agent ... act a as li- property of intellectual number Club schools”; of any or for conference school here. MLBP does not censes available rather, may products limit the of that be number by contribution made essential [t]he it (although doubtless re- licensed would arrangement is to define the NCAA’s product fuse that it believed to license televised, games may of that be number badly Major League on would reflect exposure, each to establish the Baseball); indeed, presented evi- of each and to define the basic terms existing pro- dence that works with and a contract between the network attempt to spective develop licensees home team. use MLB Intel- products new would 2948; see at at id. Id. S.Ct. has not adduced Property. lectual Salvino (The plan “places NCAA S.Ct. agreement any any that there is evidence member ceiling games the number of on can products be to limit number televise,” thereby may institutions or of entities which licensed the number quantity limit “plac[ing] an artificial on the may granted. licenses is available to of televised football any pointed has evidence Nor consumers.”). As a con- broadcasters reasonably be inferred from which it could concluded, “[p]rice is sequence, the Court li- on the number of limitation they lower than would higher output censes, licensees, bearing products or be, unresponsive otherwise and both Property is intended. MLB Intellectual Id. preference.” consumer Rather, in Parts I.B.2. and as discussed S.Ct. 2948. above, pre- the business records II.C.l. sharing, fact of revenue Except for the precisely oppo- show sented MLBP by the emphasized the factors none of site, to increase the business the desire NCAA even a Supreme Court finds Property. licensing MLB Intellectual case. superficial parallel present output also noted The NCAA Court Output Agency a. because plan NCAA was reduced able to bid “only those broadcasters Court noted that Supreme Whereas rights covering entire NCAA selling agent act television did not NCAA NCAA, sold, compete.” can U.S. being product for those whose effect, of- the NCAA A 104 true of MLBP. S.Ct. precisely opposite That fact fered bulk licenses. has no ments call for pay licensees to MLBP a Here, analogy prospective percentage moneys here. licen- they receive from can and obtain from MLBP a the sale request bearing see Thus, Property. MLB Intellectual the intellectual al- property license use though royalty Clubs, percentages any single or all for various some *34 standardized, of types products may be the Club. dollar to paid by amounts be to MLBP the b. Prices and licensees not vary are uniform but Preferences instead with the licensees’ sales. finding In the NCAA’s televi- restrictive plan anticompetitive of sion because Second, presented Salvino has no evi- price, Supreme restraints on the Court suggest dence to that the of licensing MLB that stated the Property Intellectual is entirely not re- sponsive to demand. MLBP not does is- rights NCAA has commandeered the of sue requested; licenses that are not and there rights its members sold those for entity is no evidence wishes to doing, sum certain. so it has fixed obtain a for particular license minimum, intellectual price the maximum actual property required is accept pay to for a paid which will appear- be to the schools license encompasses other intellectual ABC, ing on CBS and TBS. NCAA has property as well. produces created the mechanism which telecast, price uniform each national Moreover, it may presumed that a price uniform for each regional licensee, prospective acting in its own eco- controls, telecast. Because the NCAA self-interest, of nomic requests licenses price paid is right the which the to respect products with to it believes any particular game respon- televise is Thus, purchased. will be grants neither the quality sive relative the of licenses that are responsive to the licen- game nor playing teams to viewer anticipation sees’ of consumer demand. preference. Further, a licensee’s actual sales NCAA, at 106 n. U.S. S.Ct. products bearing MLB Prop- Intellectual (internal omitted) quotation marks are, erty definition, responsive to con- added). (emphases The NCAA Court stat sumer Assuming demand. that the licen- that, ed that the fact under the conditions sees assess consumer correctly, demand NCAA, imposed by the “the market is not they will products sell more bearing logos responsive preference,” to viewer with of a Club is popular that more pop- —more “[m]any games result that for which there ular either because of its success on the large is a kept viewer demand are from playing field or because of a dedicated fan viewers, many games for which base—than products bearing logos of a there little if demand are nonethe popular less Club. Accordingly, because televised,” “[p]erhaps less the most requires the license the licensee pay pernicious aspect” of the plan. NCAA Id. percentage of its prices, sales the licensee (internal 34, 104 n. S.Ct. quota pay higher will MLBP dollar amounts with omitted). tion marks respect to the intellectual property The NCAA controls and lack of popular Thus, more Clubs. the dollar responsiveness to demand find parallels no amounts of the license fees received present First, in the record. a license to MLBP with respect to the intellectual use MLB Property Intellectual is not sold property of the various Clubs uni- are not certain”; “for a sum licensing agree- Club, form from Club but instead are licensing protection tralization to the relative responsive both plainly pro has Property MLB Major League Base- Intellectual quality of various many cost-savings and duced efficiencies. preferences ball teams And, NCAA Indeed, MLBP re- to the effect the fact that contrast buyers. in Parts I.B.2. and II. higher plan, revenues as discussed proportionately ceives above, than Clubs others since the made MLBP respect to some C.1. Clubs complains agent for all retail of what Salvino their exclusive the cornerstone ie., restrictions, Clubs’ bearing Prop MLB Intellectual “price” products equally. profits erty, of licenses and licensees agreement share the number multiplied. has MLBP-licensed Finally, by the consumer are not desired *35 Moreover, NCAA, in unlike the record because the licenses
purchased. And facts no to present the record contains payments of granted by require MLBP hypothesis that if MLBP support Salvino’s sales, prod- of the licensee’s percentages the exclusive licensor with were not Clubs’ consumer do not ucts behind the left products, more li- respect to retail even to or to the payments result in granted. censes would be When Salvino’s Clubs. economist, Guth, deposi- at was asked his opinion tion in his there would be whether sum, pay- certain” In unlike the “sum[s] licenses if the Clubs were allowed to NCAA, more payable in the dollar sums able (see 136-37), Dep. directly Guth at license prop- to use the Clubs’ intellectual licenses stated, yes give you straight “I he can’t entirely are re- erty not uniform and answer,” question “that’s a or no because preferences of licensees sponsive the explored with em- that to be some needs consumers. product and retail (id. 137). Guth, analysis” at howev- pirical er, analyses. empirical conducted no had Procompetitive c. Efficiencies 137-38.) (See at id. rejected the NCAA’s NCAA Court The television contention that its restrictive rejected, for The NCAA Court also two procompetitive efficiencies. plan produced reasons, procompetitive-effi- the NCAA’s reasons, none The several Court stated on the contention that rested ciencies applica- any been to have which has shown legiti- the NCAA had proposition bility here. in “maintain- interest important mate among amateur ing competitive balance matter, the found general As a Court NCAA, 117, at 468 athletic teams.” U.S. procompetitive-effieien NCAA’s the First, noted 104 Court S.Ct. 2948. supported by the cies was not contention interdependence no there was real restricted, production was record because teams, “any nor college indeed among enhanced, by plan. “If readily group competitors,” identifiable plan produced procom television NCAA’s 2948, 118, re- at 104 S.Ct. such id. efficiencies, plan would in petitive bal- quire steps competitive to maintain of tele output and reduce crease ance. NCAA, 114, 104 U.S. at games.” vised 468
S.Ct.
claim that
its
The NCAA does not
is in-
equalized
has
or
case,
plan
in
television
present
as described
above,
competition within
I.B.2., II.C.1.,
equalize
tended
Parts
and II.C.3.
nationwide
that,
league.
plan
one
The
is
similarly to the blanket
shows
record
Music,
single league
there
no
scope
cen-
is
at
in Broadcast
issue
college
tournament
which all
Finally,
football
the NCAA
contended
compete.
teams
plan
procompetitive
television
was
be
necessary
cause it
college
to permit
(footnote
117-18,
Id. at
Guth empirical ques- A. Again, that’s opinion given reiterated an his deposition, I’d Sitting today, [ ] here be less tion. quite “‘MLBP Report that in his initial other, way one or the opining confident pric- over sufficient control likely exercises they could entirely possible but it’s for plush use club marks ing licenses for [sic; part in the relevant market?]. these toys and similar so Q. with you Are Salvino familiar (id. market’” at 33 a relevant constitute logos? that carried NFL team Bammers 23)), ensuing IT Report Guth (quoting specifically. A. Not opinion that that questioning revealed Q. Let’s assume the moment but on factual evidence based made Bammers. some “guessfes]”: A. Sure. club marks a market for Q. So that’s Q. plush The same size bear toys plush and similar or market York logo, a NFL team New carried products? you example, For would consid- Giants. used a market for club marks A. It’s be in or the relevant er those to outside conjunction plush toys simi- market? products. lar what a[n] A. I think that that’s em- any understanding Q. you Do have analysis really you pirical let[s] focus Team Beans is? what *37 mean, you’re getting on. I that’s where My recollection specifically. A. Not empirical questions, in meaningful to the has Major League Baseball had or is base- my you know opinion. Whether one, maybe entities several licenses ball, given its— given seasonality toys. plush kind[s] for similar products way in which its are made understanding as to Q. your isWhat public competes with club available product not Beans whether or Team similar product or license for marks or the relevant market within outside products sports that indeed other your opinion? [in] in different sea- made non-sports and today, I think Sitting A. here would are the the same season. Those sons or market. probably within the relevant it’s analysis ought empirical an issues that Q. Why? to address. my guess that those
A. It’s have Q. Sitting today, you here do in the framework of discrete defined Bammers as to whether opinion likely up show as survey would choice be within or with NFL marks would sensitivity Sal- having price vis-a-vis the the market? outside that, I don’t know but products. vino really don’t. I Frankly, A. I No. know, that’s, you sitting today, here that an in- mean, asking me whether you’re my guess. would be know, on, an you in the crease made you that Salvino Q. Are aware buy people NFL Bammer would lead have club Bammers that did not some in- Bammer Major League Baseball mark, num- had a name and player but Bammer, just the NFL stead of only it? on ber words, I’m sure I listening those would, concluding that recollection, basis for my yes. see A. That’s Association, NFL, NBA, to leave to an ers’ going empiri- but I’m that NHL, Ali,” analysis. cal “Muhammad and other individ Indeed, uals. a Salvino brochure declared Q. you But haven’t undertaken that “ that Bammers were ‘America’s Number analysis yet empirical either? ” baseball, football, Sports Collectible’ in correct. A. That’s basketball, boxing, skating, hockey, ice (Guth added); at 33-36 Dep. (emphases (See NASCAR. Response Salvino (Guth stating see at 60 also id. that ¶ 120.) MLBP 56.1 Rule Statement market, identify empirical the relevant addition, testified, president Salvino’s vice not only studies would be needed with alia, inter competed NFL, respect respect to the but also with “‘anybody produces sports who licensed “NHL, NBA, Major League, to the Soccer products; anybody produces, you who cetera,” et as well popular cartoon know, collectibles, signed products, memo items).) (We think Guth’s views could also rabilia; anybody who produces licensed empirical study benefit an in from key chains, zipper pulls, key non-licensed regard preferences. cluded fan He ” (Salvino chains, pulls.’ zipper Response purposes indicated that depo “[f]or [his ¶ 116.) to MLBP Rule 56.1 Statement testimony having without done em sition] then, Plainly, present- evidence pirical analysis,” he supposed a con that, ed to court the district indicates un- purchase sumer who unable to like the unique product, NCAA’s college York New Yankee Bammer would football, there are available substitutes for eschew an Jets Bammer and NFL would MLB Property. Intellectual in part Based substitute an MLBP rep instead Bammer facts, opined the above (Id. Fisher resenting Boston Red Sox. power MLBP lacked relevant 58.).) mar- ket, which he defined as no narrower than had not While Guth conducted the em the market for the intellectual pirical studies he testified were need property sports related to and certain en- ed could before he do more than make products. tertainment guesses might what as to be substitutable *38 licenses, for Intellectual Property Finally, MLB there seems genuine no ample in dispute there was evidence the record that the market level that is at that MLB prospective licensees of Intellec issue level, in this case is licensing the tual Property displayed interest in with using at that being demand level influenced of, alia, property (see, intellectual inter other demand at the consumer level e.g., ¶ sports ¶ and For leagues. example, 18; entities Report 23), Fisher Report Guth above, as set I.B.2. representa out Part and professional sports that other entities tives of Coca-Cola told the MLBP execu have operations, centralized licensing e.g., that, tive a years committee few NFL Properties, Properties, NBA earlier, (see had above). Coca-Cola chosen to use NFL NHL Enterprises Part I.A.3. for property pro intellectual a nationwide Although purported Salvino to contest the campaign, motional rather than MLB In assertion that with competes these Property, entities, tellectual because ease of li other challenge Salvino’s does not Further, censing. as set in greater present out genuine dispute, given a the evi above, (a) detail in Part I.B.3. when Salvino dence that disputed Salvino has not sought an MLBP license in that the standard license issued each of stated that it had sold Bammers bearing sports these other entities states that the the property MLB Play entity right intellectual of the has the exclusive to license 2466). at 102 S.Ct. uniforms, Society, 457 U.S. emblems, initials, names, the NCAA of both However, the circumstances of each property intellectual other Society dif- County Medical Maricopa sports professional that within team here. from those significantly fer licenses (b) obtained that Salvino league; Society, proper County Medical using intellectual Maricopa In Bammers for basketball, that plan football, baseball, boxing, concerned was the Court ty (c) NASCAR; that prices of maximum fixing hockey, and involved skating, ice health services being charge for that able could physicians stated itself that Salvino insurance specified under provided Properties policyholders NFL deal with “independent were shop[ping]”; physicians The “one-stop plans. advantage of at 457 U.S. entrepreneurs.” by the Coca- competing (d) was informed that MLBP case, present In the had a NFL 102 S.Ct. representatives Cola professional contrast, in the Clubs are over MLB advantage competitive interdependent had a cen teams NFL baseball because mid-1960s Further, Major Leagues. not. MLB did entity and licensing members tralized below, the Part II.C.5. discussed in as whether asked Further, Guth when among the balance need as the leagues sports such the fact of the well-being to the is essential Clubs li- use centralized NBA, NHL NFL, Leagues. analysis his affect censing entities would case, in- NCAA, which, present like the a central- MLB needed or not to whether teams, dif- significantly is sports stated Guth volved organization, ized it would, because present he ease from ferent did not think although he Col- college level. at the sport out of factor] involved [that dismiss “wouldn’t an edu- 115.) provide primarily consider (Guth leges exist We Dep. hand.” indeed, students; some face Salvi- cation telling response this a all. program li- football have no colleges that centralization no’s contention involves contrast, present ille- case declared should be in MLBP censing Providing professional level. at the sport look—treatment quick se or on gal per respective in their anticom- entertainment unless baseball inappropriate is d’etre; if a raison intuitively the Clubs’ practice Leagues nature of petitive sufficiently to at- compete cannot Club obvious. (ie., moves fans, to exist it ceases tract Sharing Revenue d. and becomes location geographic another Club). professional base- The a different Court’s Supreme only aspect *39 enhanced is product entertainment ball is even plan the NCAA criticisms competitive fostering by protected case is the present similar superficially with Colleges among the Clubs. balance the NCAA observation the Court’s competitively weak are teams sports plan was pursue to exist continue nonetheless provide that tends price restraint “a goal, education. primary their practi- to all rewards same economic skill, their of their County Medi regardless Maricopa sum, tioners unlike or their will- training, NCAA, case involves this experience, Society and cal and diffi- in league innovative employ ingness sports integrated professional independent procedures.” are cult competitors which balance interdependent, but 33, 104 S.Ct. NCAA, n. 468 U.S. both essential is the teams among County Medical Maricopa (quoting viability of public the Clubs and interest in ing the MLB Product, Entertainment sport, profit sharing is a legitimate Clubs plainly operate do not separately or approved by both of the econo- independently but rather interdepen- means — case, in mists this see Part II.C.5. below— dent entities in an organization that is of maintaining some measure competi- highly integrated. balance.
tive It is undisputed that the production and value of the MLB Entertainment Product Sports Ventures Professional affect the value of MLB Prop- Intellectual present In the case, the district court erty. example, For Major when observed antitrust challenges to the League Baseball players were on strike in operations sports leagues have generally 1994 and sales of products bearing analyzed by been the courts under the rule MLB Intellectual Property decreased; reason, than being rather illegal held ended, when the strike sales of those prod- se, per because competition among the ucts Further, increased. the value of the teams in their fields of play is to an extent intellectual property of particular Club is dependent upon the teams’ cooperation dependent part in on that Club’s member- each other various other respects. (for ship in MLB example, Fisher pointed Salvino contends that error, this was argu- to the decline value of the intellectual ing that of intellectual prop- property of such former Clubs as the erty only “collaterally profes- related to Houston Colt 45s and the St. Louis sports” sional and that “[t]he conduct Browns), and in part on the Club’s popu- here, issue naked horizontal and out- larity. Although every no Club doubt has put restrictions, traditionally falls within fans, core of die-hard a Club’s popularity per (Salvino se proscriptions.” brief principally affected by its success on the on appeal added).) (emphasis at 20 Given baseball field how the play of each that the only record shows increases, not game relates to the season as a whole. decreases, (see output Parts I.B.2. and Moreover, it cannot be disputed above), II.C.l. and that the so-called performance aspect of a Club’s popularity “price” challenged by restriction Salvino is is related to the Clubs’ interdependence. simply the equal Clubs’ sharing of MLB Obviously, a team cannot win games or (see Intellectual Property licensing profits championships unless it opponents. has above), Part II.C.2. Salvino’s contention Thus, even Clubs that fail to achieve win- that the district court erred in not apply- ning records, and that have small ing per se quick-look analysis is merit- bases, fan steadfast contribute to the popu- less. larity of the more successful Clubs. Di- As discussed above, Part I.B.l. rect licensing by Clubs, as recom- MLB Entertainment Product comprises mended Guth, would result 2,400 some regular-season interrelated in the popular more Clubs granting more Major League games Baseball played each licenses and receiving more income for year, *40 by playoff followed games for the their intellectual property than the less American and National League champion- popular Clubs grant would and receive. and ships, culminating in the World (See, Series. e.g., Salvino (“If brief on appeal at The production of this entertainment re- organization an is successful in ... compe- quires joint the efforts of Clubs; the 30 tition, it then it should be entitled to reap the cannot be produced by any one Club indi- ¶ fruits of acumen.”); Guth Report vidually by or even a few Clubs. In creat- (describing “an alternative role for MLBP” to the licensing income of distribution reve- generate “ability to Clubs’ in which quick-look upon or se illegal per is Clubs depen- would be licensing from their nues such a precisely that telling is analysis, it mark[s]”).) This of their value on the dent ultimately approved distribution however, income, licensing inequality In initial Re- his expert. own Salvino’s popular the “over-compensat[e] would equaliz- of goal the stated port, Guth all Clubs.” of efforts joint the team could be competitiveness ing the Clubs’ 81.) ¶ (Fisher Report “sharing ticket revenues achieved distribu- Further, disproportionate the of imposition the revenues” broadcast a foster would licensing income tion (Guth Report salary cap rules.” “team among Clubs. imbalance competitive difficult, logical a 10.) ¶ as findWe balance” “competitive concept of sharing of reve- why matter, fathom to oppor- equality of expected reflects licensing of intellectual nues from on the prevail compete and to tunity valid than the any less should property also relates balance Competitive field. revenues sharing of Guth-recommended team that each expectations fans’ to the fact, Guth And in sources. from other each champion potential ais the free- suggested that ultimately —i.e. himself to opportunity a reasonable has Club if Clubs could occur which problems, rider compete also to game (cid:127)win each by “the be solved directly, should licensed i.e., MLBP,” championship. of the sharing aspect revenue distributions equal ¶ 14.) (Id. the Clubs: to profits dispute here genuine no is There ana- as problems these to solution [T]he Enter- the MLB value
maintaining the to has literature the economics lyzed in bal- competitive requires Product tainment to the pay-offs modifying do with “com- calls Fisher among the Clubs. ance incen- individually so that Clubs to the success critical ... balance petitive capturing pre- consistent tives are ¶ 68.) (Id. And Salvino acknowl- of MLB.” Thus, for exam- externalities.... vailing edges that to currently pay-offs sets ple, MLBP sports teams, teams like all MLB propor- a one-thirtieth on clubs based in terms cooperate leagues, need Moreover, each club. share tionate format, league rulemaking, scheduling, has generally Baseball Major League live both balance competitive it to deal available tools variety of games, televising of performance overall reve- large slice” with “too product, and market create order or another. Club to one going nue games. is baseball which revenues, sharing ticket include These (emphases revenues, in- (Salvino appeal MLB brief contract TV national action California and exces- added); licensing, also Salvino’s see property tellectual case, ¶ competitive this “on-field (citing adjustments. complaint payroll sive procompetitive aspect sharing or “legitimate aas revenue balance” similar, likely MLBP, something goal”).) externality prob- to solve “all the sufficient opined Fisher Accordingly, actually exists. lem, problem such if to ensure in order must be rewarded Clubs (em- omitted) ¶ (footnote (Guth Decl. as well efforts league-wide continued added).) Indeed, view Guth’s (Fisher Re- phases balance.” foster profits distributions equal And original).) ¶68 (emphasis in —which port *41 challenges that Salvino only conduct is the equal MLBP’s argues while Salvino “price restrictions” —would in fact be sented no that, basis for a ruling if rule-of- procompetitive: “Revenue sharing analysis reason applicable, the district which payoffs teams’ are based on the total court erred in the conduct of that analysis. figure encourage would teams to maxim- Our own persuades that, examination us ize total revenues in order to maximize record, on this the district analysis court’s own, even if this would otherwise be was correct. express We no view as to inconsistent with their individual inter- what the outcome would be of a case in ¶ (Guth added).) (emphases ests.” Decl. 17 plaintiff which a challenging the Clubs’ centralization of licensing functions in sum, given Salvino’s own view that MLBP as their exclusive teams, licensing agent “MLB like all teams in sports adduced admissible leagues, cooperate need to evidence as to the terms of. rea- (Salvino sonableness of that balance” ap- practice. brief on 27), peal at expert’s Salvino’s view that “[rjevenue ... sharing encourage[s] teams CONCLUSION (Guth
to maximize” output and revenues ¶ 17), Decl. defy would reason for this We have considered all of Salvino’s ar- Court accept Salvino’s contention that guments on this appeal and have found any anticompetitive aspects of the Clubs’ them to be without merit. The judgment agreement equal on the division of of the district court is affirmed. licensing profit MLBP’s are at all appar- ent, much less so agree- obvious that that SOTOMAYOR, Judge, Circuit
ment should have held illegal per been se concurring in judgment: or upon quick look.
I
fully
concur
judgment.
I write
separately
D. Rule
because I
Reason
believe the majority
endorses an overly formalistic view of
Finally, given
present record,
price fixing and in
doing
so
avoids address-
we see no
error
the district court’s
ing directly the central contention
ap-
analysis of Salvino’s claim under the rule
pellant Salvino,
(“Salvino”)
Inc.
of reason. The court noted that Salvino
exclusive arrangement between the Major
proffered
had
no evidence that the central
(the
League
“Clubs”)
Baseball clubs
ization
in MLBP
caused
Major League Baseball Properties,
Inc.
actual injury to competition or any evi
(“MLBP”)
removes all
competition
dence that MLBP possessed power in the
between the Clubs on the licensing of in-
relevant market.
that,
The court stated
property
tellectual
in violation of the Sher-
“[i]ndeed, Salvino
respond
did not
Act,
man
§
Further,
U.S.C.
while I
arguments
MLBP’s
regarding the rule of
agree with the ultimate outcome of this
analysis
reason
urged
instead
appeal, I
my
reach
conclusion using a dif-
analyze
Court to
its claims under
per
ferent framework
majority,
than the
apply-
se
quick
doctrine,
rule or
look
neither of
ing the doctrine
ancillary
restraints,
which
require
would
Salvino to make a
which I believe more efficiently addresses
showing of adverse effect on the market.”
presented
the issues
here.
On appeal, this again argued applying has Before framework, this howev- solely that er, the court should I applied have address the majority’s flawed view per se or quick-look rule and pre- has that the Clubs have agreement made no
335 permit rigid to not so as are laws Clubs trust the undisputed It price.1 exclusivity easy evasion. through the such agreed have agree- MLBP in the clauses profit-sharing long have price agreements Explicit on other each compete with to ment to restraint price a unnecessary for been Instead, licenses. of trademark the sale See, e.g., United unlawful. per se be the sole MLBP give to agreed they have 127, U.S. Corp., Motors 384 v. Gen. States Major all for prices authority to set 1321, 415 16 L.Ed.2d 142-43, S.Ct. 86 to share licenses Baseball League States, v. United Co. (1966); Tobacco Am. licens- those from proceeds in the equally 1125, 90 809-10, 781, 66 S.Ct. agreement U.S. the While 328 ing sales.2 Indeed, the charged, (1946). the be mere price to specify 1575 does not L.Ed. clearly eliminates agreement exchange to competitors effect among agreement for the Clubs between competition price price-fixing per se information price agreement An licenses. trademark 393 U.S. Corp., See Container violation. mar- the from competition price eliminate also, 510; e.g., 334-38, see S.Ct. 89 at See, e.g., fixing. price essence ket is the Inc., Sales, 446 Catalano, Target v. Inc. Am., Corp. v. Container States United 1925, 64 L.Ed.2d 650, 643, 100 S.Ct. U.S. 510, 21 L.Ed.2d 333, 337, 89 S.Ct. U.S. 393 curiam) (holding agreement (1980) (per 580 (1969). 526 make re sellers among wholesale beer contends Nevertheless, majority illegal); se per was in cash pay tailers is not ‘price’ restriction this “so-called v. United Eng’rs Soc’y Nat’l of Prof'l an but rather ‘price’ on agreement fact an 1355, 692-93, 679, S.Ct. States, 98 U.S. 435 profits.” sharing of agreement (1978) (holding agreement L.Ed.2d 637 318-20 319; id. at also see Maj. Op. at to discuss to refuse engineers among correct, II.C.2). majority (Part Were until after customers potential prices anti- could evade companies competing engineer per anof initial selection “joint ven- creating a simply laws trust Socony-Vacu v. illegal); United States se seller the exclusive to serve ture” 222-24, 60 S.Ct. Co., 310 U.S. Oil um as no long So products. competing their (1940) agree (holding L.Ed. be prices to listed explicitly agreement buy surplus among competitors ment mo- act as could companies charged, majori illegal). per se gasoline was venture,” set- “joint through nopolists precedent with this at analysis is odds ty’s competing together ting prices an require majority appears because cate- would majority because products, be indicating explicitly agreement formalistically as these actions gorize considered may be agreement fore anti- profits. The share agreement a few majority, there As noted majority 2. weight the much unclear how 1. It is exclusivity agree- price or any explicit exceptions to the the lack limited places on restrictions, Maj. Op. at 317-20 allowing ment, example, see Clubs output including, for ultimately relies II.C.1-2), (Parts or whether dogs on hot trademarks their own to license case between this it draws the distinctions their home within items sold and similar Music, Broad v. Columbia Inc. and Broadcast Op. 297- Maj. territory. See broadcasting Inc., 99 S.Ct. U.S. casting System, excep- Notwithstanding these narrow (1979), v. and NCAA 60 L.Ed.2d containing the tions, nearly all retail 85, 104 S.Ct. U.S. Regents, 468 Board of League Major Base- property of intellectual (1984), Maj. Op. 319-30 see 82 L.Ed.2d (Parts through licensed Clubs must or the ball II.C.3-4), reaching conclusion MLBP. apply. reason should the rule of *43 336
per
illegal price
(1951)
se
restraint.3
(“Nor
No such
6. The doctrine of
have—I
courts
commentators
8. Several
ancillary
restraints has
Music
correctly
Broadcast
then-Judge
believe
opinion by
Taft.
in an 1898
roots
—viewed
NCAA,
Co.,
primarily relied
the two cases
Pipe
Addyston
& Steel
United States v.
See
applications
majority,
implicit
Cir.1898),
as
(6th
aff'd,
upon by the
175
F.
280-83
See, e.g.,
analysis.
(1899).
ancillary
restraints
of the
In
exclusivity
this
and profit-
profit-sharing provisions,
these externali-
sharing
provisions
agree-
ties
could diminish
efficiency
MLBP’s
reasonably
ment
necessary
Indeed,
achieve
gains.9
own expert,
Salvino’s
efficiency-enhancing
MLBP’s
Guth,
purposes be- Louis
admitted in his deposition,
they
cause
potential
eliminate several
ex- when asked whether there would be more
may
ternalities that
otherwise distort
licenses
less
without
the centralized
incentives of individual Clubs and limit
MLBP,
control of
that he
give
could not
potential efficiency gains of MLBP. See
straight yes or no answer without empiri-
Report
Fisher
at 31-37. Most notable of
cal analysis because of
potential
these
ex-
these externalities
is the so-called free-
ternalities. See Guth
Dep.
135-37.
problem.
rider
Because of the interdepen-
words,
other
Guth conceded that the chal-
dence of the Clubs within the setting of a
lenged provisions could
a procompeti-
have
sports league,
riding
free
would occur if
tive impact
related to the efficiency-en-
one of the
Clubs
able to benefit dispro-
purposes
hancing
of MLBP.10 Under such
portionately from
Major
the actions of
circumstances,
challenged
restraints
League Baseball or other
in the
Clubs
must be viewed
ancillary
joint
to the
products.
Id. at
This
32-35.
venture and reviewed under
the rule of
may lead to inefficiencies because the
reason in the
joint
context of the
venture
Clubs’ incentive to
invest
the promotion
as a whole.11 See Rothery Storage, 792
*47
and development of
(“[Elimination
prop-
intellectual
F.2d at 228
of the free ride
erty
and other licensed
may be
an efficiency justification
is
available to
distorted.
Id. Both MLBP and Salvino
horizontal restraints that are ancillary to a
recognize that
the exclusivity
without
integration.”).
contract
sonably necessary
to achieve
of the effi-
approach
look
appropriate
is
because those
ciency-enhancing objectives of the NCAA.See
analysis
methods of
practices
are reserved for
113-15,
2948;
sivity agreements, ar- dangers of exclusive
anticompetitive Music, 441 U.S. Broad.
rangements. See (emphasizing 23-24, 99 S.Ct. have and authors composers
“individual
individually in
sell
not to
agreed
neither
N.A.,
BANK,
li-
CAPITAL
PACIFIC
blanket
nor use the
market
any other
Plaintiff-Appellee,
other
fixing
such
mask
cense to
NCAA,
at 114 n.
markets”);
U.S.
v.
individual
(“Ensuring that
properly record, Salvino present On the
at 332-33. an “actual no evidence of
has adduced a whole competition
adverse effect