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Tuesday, February 02, 2010
MLB Properties v. Upper Deck Trademark Infringement Suit

Maury Brown of the Biz of Baseball blog reports that Major League Baseball Properties, MLB's trademark licensing and enforcement entity, filed a trademark infringement suit yesterday against trading card manufacturer Upper Deck. The suit was filed in the United States District Court for the Southern District of New York, and alleges that two new sets of trading cards produced by Upper Deck – the Ultimate Collection and Signature Stars sets – improperly use MLB trademarks without permission.

The issue arises out of MLB's decision last summer to name Topps as its exclusive licensee for official MLB sanctioned trading cards. At the time, Upper Deck threatened to file an antitrust lawsuit against MLB, but in lieu of a suit the company apparently elected instead to produce two sets of cards without MLB logos or trademarks, but featuring photos of players in their official MLB uniforms. MLB Properties's suit alleges that this unauthorized depiction of official MLB uniforms constitutes trademark infringement.

For its part, Upper Deck maintains that MLB's position is without legal basis, citing a 1998 decision by the Southern District of New York refusing to grant MLB an injunction under similar circumstances -- a decision later vacated by agreement of the parties. See Major League Baseball Properties, Inc. v. Pacific Trading Cards, Inc., 150 F.3d 149 (2d Cir. 1998).

It will be interesting to see if Upper Deck now elects to assert an antitrust counterclaim challenging MLB's decision to grant Topps an exclusive license. Such a claim would be similar to the exclusive license at issue in American Needle v. NFL, and might also raise interesting issues regarding the scope of MLB's historic antitrust exemption (although MLB Properties notably elected not to rely on the antitrust exemption in another recent trademark related antitrust suit, Major League Baseball Properties, Inc. v. Salvino, 542 F.3d 290 (2d Cir. 2008)).


I think that it is interesting in viewing the actions of MLB Properties here and in reading the transcripts of the oral arguments in American Needle that little attention is being paid to the ultimate consumers of these products - the fans who purchase baseball cards and the hats with NFL logos. If you allow only one producer, what does that say about the monopoly grant of an exclusive license? Certainly the cost of baseball cards and NFL hats can be pushed upward. I realize that this might be more of a section 2 discussion than a section 1 discussion. If the NFL wins its point about single entity in American Needle, it might foreclose a section 1 challenge but not a section 2 challenge. The Curt Flood Act of 1998 might be strong support that MLB Properties can use to bolster its argument that all of the business practices of Major League Baseball except labor relations with major league players only (minor league players have no rights here)are protected by baseball's antitrust exemption. The baseball card market was really softened a number of years ago by the production of too much product. MLB Properties wants to let Topps become a monopolist again. For those of us who remember all of the legal issues surrounding Bowman and Fleer, this is an interesting twist. Also, the Haelen Labs case that gave birth to the "right of publicity" draws from this same factual setting. It will be interesting to watch the developments here.

Blogger Ed Edmonds -- 2/02/2010 9:32 AM  

Thanks for the update and this post.

Anonymous Anonymous -- 2/02/2010 10:12 AM  

What makes this case very interesting and unique is that MLBP granted Topps an exclusive license and the MLBPA did not (and in fact issued a license to Upper Deck). Thus, apart from the antitrust issue is a possible counterclaim that MLBP is tortiously interfering with the MLBPA-Upper Deck contractual relationship as well as the contractual relationship between Upper Deck and its distributors.

Blogger Rick Karcher -- 2/02/2010 10:33 AM  

People still buy baseball cards? News to me.

Blogger Pbenn001 -- 2/02/2010 11:49 AM  

Does anybody still buy baseball cards?

Anonymous Matt -- 2/02/2010 12:21 PM  

Actually I still collect cards in earnest. I am old enough that I can say I have been doing this for over 50 years less the four years that I was in college. The market has been flat even for vintage cards for about fifteen years. Donruss and Fleer are out of the picture leaving Upper Deck and Topps as the two main players. I do think that many "collectors" lost interest when the appreciation value of cards bottomed out. Now you have autographs, pieces of bats and uniforms, and other memorabilia inserted into "chase cards" to attract buying attention.

Rick makes a very good point about the Players Association. For years the PA's have used licensing revenue to create their strike fund. MLBPA was helped in their infancy by their licensing deals and one of the main sources was Topps, who paid players next to nothing back in the 1960s before Marvin Miller was hired. So, their desire to maintain their relationship with Upper Deck should not be minimalized.

Blogger Ed Edmonds -- 2/02/2010 2:06 PM  

Calculation is not being. Main sequence. It's all business.

Anonymous Anonymous -- 2/03/2010 1:29 PM  

The market has been flat even for vintage cards for about fifteen years.

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Blogger prashant -- 2/04/2010 11:34 PM  

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