*By Brian Michael Cooper
The nor’easter that raged during the 2007 Boston Marathon wasn’t the only storm that hit the 111th running of the race. Another storm blew in from the southwest, right as a group of runners finished the race wearing shoes from little west Texas shoemaker Spira Footwear.
During the marathon, runners Jared Nyamboki and Josphat Ongeri, sporting yellow Spira racing flats, jumped out to an early lead (and significant television coverage) and maintained the lead for a considerable portion of the race. Oleg Strijakov also wore yellow Spira shoes to victory in the marathon’s Masters division.
Unfortunately, there’s a small asterisk next to this feel-good story. Spira shoes have not yet been approved for use in competitive races, including the Boston Marathon, by the governing bodies of track and field, USA Track and Field, Inc. (USATF) and the International Association of Athletics Federations (IAAF).
Current USATF and IAAF rules prohibit the use of any technology in a competitive running shoe that provides an “unfair advantage.” IAAF rules are silent on what this means, but USATF rules note that such technology would include a “spring or similar device.”
When El Paso-based Spira introduced shoes implementing “wave-spring technology” it ultimately expected the USATF and IAAF to review the technology, and then reconsider and/or amend the rules to include Spira’s spring-soled shoes. Although the USATF and IAAF have not rendered an official position on the legality of the wave-spring technology, it appears elite runners and clubs such as the Boston Athletic Association have interpreted the federations’ silence as tantamount to a ban.
As a result, Spira is preparing for a different type of race – an antitrust marathon in a Texas federal court.
In April, Spira sued the USATF and IAAF, claiming the track and field federations have violated federal and state antitrust laws. In particular, Spira claims the federations have conspired to restrain competition in the market for athletic running shoes through their tacit promulgation of rules that have effectively banned spring-soled shoes from competitive races.
Spira contends this implicit ban (and corresponding implicit threat of disqualification for use of the shoes) in competitive races such as the Boston Marathon has dissuaded elite runners from using the shoes, and thus crippled Spira’s efforts to market the shoe to the everyday runner. If the USATF and IAAF choose to “enforce” the ban, and fight Spira’s antitrust allegations, one may expect the federations to counter that use of wave-spring technology results in a competitive disadvantage for which its rules are designed to protect.
The potential legal battle between Spira, USATF, and IAAF is nothing new. For years, sporting goods manufacturers marketing technologically-advanced sports equipment have clashed with athletic organizations charged with maintaining the competitive integrity of their respective sports.
Historically, these challenges have had mixed results: In the early 1990s, Ping, who introduced square-grooved golf clubs, and pro golfers who used the clubs, successfully enjoined a ban of those clubs by the PGA Tour. Conversely, a decade earlier, a federal court upheld the United States Tennis Association’s ban of the “double-strung” tennis racket because the top-spin created by that type of racket would have harmed the character and competitive integrity of the game.
The outcome of these battles also may have serious economic ramifications. Most famously, in 2000, Callaway Golf introduced its ERC II driver, which the United States Golf Association promptly declared “non-conforming” due to the spring effect of the club’s face. When pro golfers couldn’t use the club, the everyday golfer also chose not to use it. Sales of the driver plummeted, and the company stopped selling the club in the U.S. after a year.
What will be waiting for Spira at the finish line of its antitrust suit? Answering this question requires a brief overview of the course Spira’s case will have to run. The court has some alternative routes to consider when addressing Spira’s antitrust claims. It could determine that the USATF/IAAF ban should be considered a group boycott, generally subject to per se analysis in which the activity is presumed to be illegal under antitrust law without any need for the court to evaluate its pro-competitive or anti-competitive effects.
This conclusion seems unlikely, however, given that the restraint at issue is not one that would generally raise such a presumption (as opposed to say, price-fixing or market allocation) and moreover, the USATF and IAAF are not competitors in the market for the manufacture of competitive running shoes, which would seem to weigh against characterizing the federation’s actions as a group boycott.
Instead, it is more likely the court will analyze Spira’s antitrust claims under the “rule of reason” test, first addressing whether the USATF/IAAF ban on Spira’s wave-spring technology has or is likely to have substantial anti-competitive effects on competition in the relevant market, and if so, whether the pro-competitive benefits of the rule outweigh those effects.
If the court reviews Spira’s antitrust claims under the rule of reason test, its inquiry will focus on whether the USATF/IAAF rule was intended to accomplish an end that justified its use (e.g., maintenance of the competitive integrity of track and field) and whether the rule was reasonably related to achieving that goal.
The court also will consider whether the USATF/IAAF rule was no more restrictive than necessary, and whether the federations had any safeguards that prevent the rule from being imposed arbitrarily, thereby providing some level of judicial review. Regarding this last factor, Spira claims it hasn’t had such a review, and that it spent years soliciting the IAAF and USATF for approval of its wave-spring technology without an official response from the federations.
At the end of the day, however, the court’s application of the above factors to Spira’s antitrust suit might hinge upon the quantitative, not legal, analysis of whether Spira’s wave-spring technology impacts the competitive integrity of track and field.
The USTA’s successful defense of its ban of double-strung tennis rackets was due in large part to the court’s acknowledgment that the USTA and International Tennis Federation had spent considerable time evaluating the performance of those rackets (including testing and observations from players that the rackets led to unusual results) before concluding the amount of top-spin created by the double-strung rackets could dramatically alter the play of the game.
The performance data relied upon by the USTA was critical to the court’s determination that the USTA’s ban was rationally related to the organization’s goal of preserving the character and competitive integrity of the game.
If the USATF and IAAF chose to fight Spira’s antitrust claims, one would expect that they would have to make a similar demonstration regarding the performance capabilities of the wave-spring technology in order to persuade a jury or court that their ban on such technology was necessary.
Spira, on the other hand, may find itself in the unique position of having to harmonize its marketing efforts and business interests with its legal strategy. From a business perspective, Spira cannot effectively market its running shoes without touting the shoes’ technological advantages. At the same time, to successfully prosecute its antitrust claims, Spira might have to downplay those same advances in order to convince a jury or court that its shoe would not harm the competitive integrity of track and field.
Spira already may have recognized this potential quandary. The company’s marketing approach seems to refrain from relying upon quantifiable measurements of performance, opting to emphasize the comfort and durability of the wave-spring technology, and its ability to prevent injury. After winning the 2007 Fort Worth Marathon in Spira shoes, elite runner Keith Pierce remarked in an article for El Paso, Inc. that he liked the Spira shoes because they were the lightest shoes he had ever trained in, but that his times had been not been any faster in the spring-soled shoes than they had been with traditional soles.
In April, Spira made a great marketing start from the blocks in one of the most prestigious events of international track and field. Now, a federal court or jury in Texas may be called upon to determine the strength of the little shoe company’s finishing kick.
*Brian Michael Cooper is of counsel in the Houston office of Haynes and Boone, LLP, a licensed NBA player agent, and a member of the governing council of the Texas State Bar Entertainment and Sports Law Section. He has completed three New York City Marathons, and will run his fourth this November.
