## Facts

- Major League Baseball Properties, Inc. (MLBP) served as the exclusive licensing agent for Major League Baseball clubs’ names, logos, and related marks.
- The MLB clubs granted MLBP exclusive authority to license their intellectual property, and MLBP distributed most licensing revenue equally among the clubs (with some club-specific royalties).
- Salvino, Inc. manufactured sports-themed plush toys and sold items bearing MLB club logos without obtaining an MLBP license.
- MLBP sued Salvino for trademark infringement in federal court.
- Salvino counterclaimed under § 1 of the Sherman Act, alleging that exclusive centralized licensing and revenue sharing reduced competition among clubs in licensing, increased prices, and limited output.
- MLBP submitted economic evidence that the clubs’ intellectual property functioned as an interdependent, league-related product and that centralized licensing created efficiencies for licensees and the league.
- The district court granted summary judgment to MLBP on the § 1 counterclaim, applying the rule of reason and finding no proof of anticompetitive effects or market power; Salvino appealed only the § 1 ruling.

## Issues

1. Whether the clubs’ agreement to license intellectual property exclusively through MLBP with substantial revenue sharing should be condemned as per se unlawful, evaluated under a truncated “quick-look” approach, or analyzed under the full rule of reason.
2. If the rule of reason applies, whether Salvino produced sufficient evidence of actual anticompetitive effects or sufficient market power to survive summary judgment.

## Decision

- The Second Circuit affirmed summary judgment for MLBP.
- The court held that the centralized licensing and revenue-sharing arrangement was not per se unlawful and did not justify “quick-look” condemnation.
- The court applied the rule of reason because the arrangement resembled joint-venture conduct with plausible efficiency justifications and required a fact-specific economic assessment.
- The court concluded Salvino failed to produce evidence of actual adverse effects on competition (such as reduced output or supracompetitive pricing) or evidence establishing market power in a properly defined market.
- The court noted record evidence indicating licensing output increased (more licenses and licensees) after centralization, undermining Salvino’s output-restriction theory.
- A separate concurrence agreed that Salvino’s proof was insufficient while cautioning against overbroad generalizations not necessary to the judgment.

## Legal Principles

- Per se treatment is limited to restraints whose anticompetitive effects are so predictable that detailed market analysis is unnecessary.
- Joint licensing arrangements that plausibly create efficiencies and involve cooperative marketing of interdependent rights are generally assessed under the rule of reason rather than per se rules or truncated review.
- Under the rule of reason, a plaintiff must present evidence of actual anticompetitive effects or, alternatively, show market power plus a mechanism by which the restraint harms competition.
- Conclusory assertions that centralized licensing “diminishes competition” do not defeat summary judgment without economic or empirical support.

## Conclusion

The Second Circuit treated MLB’s centralized trademark licensing and revenue sharing as joint-venture-type conduct subject to rule-of-reason review and affirmed summary judgment because the challenger offered no adequate evidence of anticompetitive effects or market power.


Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290 (2d Cir. 2008)