AlexSam v. Simon Property Group — Federal Circuit Corrects Mootness Error but Sends Indemnity Claim to State Court

Background

AlexSam owns U.S. Patent No. 6,000,608, which covers systems used with multifunction cards such as prepaid gift cards. It sued shopping-center operator Simon Property Group for patent infringement in the Eastern District of Texas. Simon, in turn, brought a third-party contractual claim against Blackhawk Network, alleging that Blackhawk supplied the accused gift cards and had agreed to defend and indemnify Simon against infringement claims, including attorneys’ fees.

The district court granted summary judgment of noninfringement. While resolving the patent dispute, it entered broad language dismissing all remaining counterclaims and other claims as moot. That language swept in Simon’s contractual indemnification claim against Blackhawk even though the companies still disputed who should bear the defense costs. Simon promptly asked the court to clarify or correct the judgment, styling its request partly under Federal Rule of Civil Procedure 60(a). The district court ultimately maintained that the indemnification claim was moot, while clarifying that its dismissal was without prejudice.

This appeal followed earlier Federal Circuit proceedings in the same patent litigation, including a 2024 affirmance of the noninfringement judgment and a 2025 dismissal of a separate fee-related appeal for lack of a final judgment. The October 2026 opinion addressed only Simon’s effort to correct the treatment of its indemnification claim.

The Court’s Holding

The Federal Circuit vacated the district court’s order. Applying Fifth Circuit procedural law, Judge Dyk explained that courts classify a post-judgment motion by what it asks the court to do, not by the rule number written in its title. Simon’s motion challenged a legal mistake in the judgment, so it was properly treated as a Rule 60(b)(1) motion rather than a request under Rule 60(a) to fix a clerical error.

That distinction mattered because Rule 60(b)(1) permits relief from a judgment based on mistake, including a judge’s mistake of law. Simon filed its motion within the time for an appeal, and the Federal Circuit rejected Blackhawk’s argument that Simon’s only remedy was a direct appeal from the earlier judgment. The panel emphasized that Rule 60(b) is especially useful when a technical error may prevent the true merits of a live dispute from ever being considered.

The district court’s mootness conclusion was wrong because Simon and Blackhawk continued to contest Simon’s right to indemnification. A live disagreement over contractual liability does not disappear merely because the underlying patent infringement claim has ended. The erroneous mootness ruling therefore qualified as a judicial mistake that could be corrected under Rule 60(b)(1), and denying relief was an abuse of discretion.

Even so, the indemnification claim will not continue in federal court. The district court had suggested that it could decline supplemental jurisdiction over the state-law contract claim under 28 U.S.C. § 1367(c). At oral argument, Simon did not oppose a dismissal without prejudice on that basis, and Blackhawk likewise urged that result. Given the parties’ agreement, the Federal Circuit did not decide whether the usual statutory and common-law factors independently required dismissal. It instead directed the district court to enter a new order dismissing the claim without prejudice under § 1367(c).

Key Takeaways

• A court must evaluate a post-judgment motion by its substance. Labeling a motion under Rule 60(a) does not prevent a court from treating it as a Rule 60(b)(1) request when it challenges a legal mistake.
• An unresolved contractual indemnification dispute remains live after the underlying patent claims end; it is not moot merely because infringement has been resolved.
• Prompt timing matters. Simon sought correction within the appeal period, allowing Rule 60(b)(1) to operate without becoming an untimely substitute for appeal.
• Correcting a mootness error does not guarantee a federal forum. A court may still decline supplemental jurisdiction over a remaining state-law indemnification claim and dismiss it without prejudice.

Why It Matters

Patent suits frequently involve suppliers, retailers, and technology partners whose contracts allocate defense costs and infringement risk. This decision warns litigants and trial courts not to let broad cleanup language in a final judgment accidentally extinguish those separate contractual disputes. Parties should identify all remaining third-party claims before judgment and move quickly if an order sweeps too broadly.

The ruling is also a practical reminder that procedural correction and forum selection are different questions. Simon succeeded in establishing that its indemnification claim was never moot, but that victory did not keep the claim in federal court. Because dismissal is without prejudice, the parties can pursue the contract dispute in an appropriate forum, subject to the tolling protection associated with supplemental claims. The opinion is nonprecedential, but its treatment of mislabeled post-judgment motions offers useful guidance in complex IP litigation with collateral commercial claims.