AlexSam v. Simon: Why a Patent Win Did Not Moot the Supplier Indemnity Fight
A patent infringement win does not necessarily end every dispute connected to the case. In AlexSam, Inc. v. Simon Property Group, L.P., the Federal Circuit addressed what happened after the accused retailer won summary judgment of noninfringement but still had a separate contractual indemnification dispute with the supplier that allegedly provided the accused gift-card system.
The October 5, 2026 decision is nonprecedential, but it offers a useful reminder for companies that sell, distribute, integrate, or resell technology supplied by someone else: patent litigation can end before the contractual allocation of defense costs does. It also shows why post-judgment motions should be evaluated by substance, not merely by the rule number placed in the caption.
The patent case ended, but the indemnity controversy did not
AlexSam owns U.S. Patent No. 6,000,608, which concerns systems for multifunction cards, including prepaid gift cards. AlexSam sued Simon Property Group in the Eastern District of Texas for patent infringement. Simon, in turn, filed a third-party complaint against Blackhawk Network, alleging that Blackhawk supplied the accused gift cards and had agreed to defend and indemnify Simon for infringement claims, including attorneys’ fees.
The district court granted summary judgment of noninfringement. Later, an amended final judgment broadly stated that all remaining counterclaims or other claims and motions not previously resolved were denied as moot. Simon took the position that its third-party indemnity claim was not moot because a live dispute remained over who should bear the costs of defending the patent case.
The Federal Circuit agreed that mootness was the wrong basis. The court stated that Simon and Blackhawk still had a continuing controversy concerning indemnification. A victory on the patent claim had eliminated the infringement dispute, but it did not answer the separate contract question.
The full opinion is available from the U.S. Court of Appeals for the Federal Circuit.
Why Rule 60(b)(1), not the motion’s label, controlled
Simon had styled its post-judgment request in part under Rule 60(a), which addresses clerical mistakes and mistakes arising from oversight or omission. The Federal Circuit instead treated the motion according to its substance and concluded that it was properly analyzed under Rule 60(b)(1).
Federal Rule of Civil Procedure 60(b)(1) permits relief from a final judgment or order for mistake, inadvertence, surprise, or excusable neglect. The Federal Circuit relied on the Supreme Court’s decision in Kemp v. United States, which held that a judicial legal error can qualify as a “mistake” under Rule 60(b)(1).
That distinction mattered because the problem was not simply a typo or a mismatch between what the judge intended and what the clerk entered. The judgment treated a still-live indemnity claim as moot. The Federal Circuit characterized that as a legal error that could be addressed under Rule 60(b)(1).
The timing of the Rule 60 motion mattered
The court also emphasized that Simon moved promptly. The Fifth Circuit generally does not allow Rule 60(b)(1) to become a substitute for an appeal after the time to appeal has expired. Here, however, Simon filed its motion within the period for taking an appeal from the amended judgment.
That procedural posture allowed the court to treat Rule 60(b)(1) as a legitimate mechanism for correcting the judicial mistake instead of an untimely attempt to relitigate an issue that should have been appealed earlier.
For patent litigants, the practical lesson is broader than Rule 60. Final judgments in complex IP cases frequently resolve more than the infringement claim. Counterclaims, supplier indemnity claims, fee motions, declaratory claims, and other collateral matters can have different jurisdictional and procedural consequences. A broad final-judgment paragraph should be reviewed against every unresolved claim before the appeal clock runs.
Indemnity rights can survive a noninfringement win
The most commercially important point is that a noninfringement judgment does not necessarily extinguish a contractual right to defense costs. Depending on the contract language and governing state law, an indemnity or defense obligation may have been triggered by the assertion of a patent claim, by tender of the defense, by the supplier’s role in providing the accused product, or by other agreed conditions.
That is why businesses that rely on third-party products should not wait until after a lawsuit is resolved to examine their supply, distribution, platform, reseller, or technology agreements. A strong patent defense strategy can include a parallel contract analysis from the beginning of the case.
Tucker Law represents clients in patent litigation and related disputes involving infringement, invalidity, damages, and litigation strategy. When a Florida federal case involves national patent counsel, Tucker Law also serves as Florida patent litigation local counsel.
The Federal Circuit did not decide the indemnity merits
The appellate court did not hold that Simon was entitled to indemnification from Blackhawk. It held that dismissal on mootness grounds was improper. The difference is important.
The district court had also indicated that it could decline supplemental jurisdiction over the state-law indemnity claim under 28 U.S.C. Section 1367(c). At oral argument, Simon stated that it would not object to dismissal without prejudice on that basis, and Blackhawk also argued that dismissal under Section 1367(c) was appropriate.
The Federal Circuit therefore vacated the order denying Simon’s motion and directed the district court to enter a new order dismissing the indemnification claim without prejudice under 28 U.S.C. Section 1367(c). The court expressly did not decide whether the normal statutory and common-law factors independently required that result, because the parties agreed to it.
That outcome preserves an important distinction between a claim that is jurisdictionally or discretionarily dismissed without prejudice and a claim that is substantively extinguished as moot.
What patent defendants should do when a supplier may owe a defense
When an accused product or system came from a vendor, manufacturer, software provider, payment processor, or other supplier, the contract file should be reviewed early. The key provisions may include defense obligations, indemnification triggers, control of counsel, notice requirements, cooperation clauses, settlement authority, exclusions, liability caps, and provisions addressing intellectual-property claims specifically.
The litigation team should also coordinate the contract claim with the patent case. If the accused customer or retailer wins on noninfringement, the patent merits may disappear while the reimbursement dispute remains economically significant. Conversely, if the supplier assumes the defense, control and settlement rights may become important before any dispositive ruling.
Companies should also distinguish between a duty to defend and a duty to indemnify. The text of the agreement and governing law can make those obligations different in timing and scope. The fact that a defendant ultimately prevails in the patent action does not, by itself, answer whether another party promised to pay for the defense.
Why AlexSam matters even though it is nonprecedential
AlexSam v. Simon is a nonprecedential Federal Circuit opinion, so it should not be presented as a new binding rule governing every patent indemnity dispute. Its value is practical. It illustrates how patent merits, contract indemnity, supplemental jurisdiction, final-judgment language, and post-judgment procedure can intersect in one case.
For businesses involved in technology distribution chains, the case is a reminder that patent risk is not allocated only by patent law. Contracts can determine who controls the defense, who pays counsel, and where a reimbursement dispute goes after the federal patent claim ends.
Tucker Law advises businesses and litigants on patent matters, including litigation and related commercial issues. If a patent claim involves a supplier, reseller, or contractual indemnity provision, contact Tucker Law to evaluate both the patent case and the allocation of defense obligations.
This article provides general legal information and is not legal advice. Contract indemnity rights depend on the specific agreement, governing law, and procedural posture.
