Federal Circuit Holds Simon's Indemnity Claim Against Blackhawk Was Not Moot and Directs Dismissal Without Prejudice.

Background

According to the opinion, AlexSam sued Simon, a seller of gift cards, on the '608 patent in 2019. In June 2020 Simon filed a third-party state-law contract complaint against Blackhawk, which supplied the accused gift cards under a 2014 agreement that allegedly obligated Blackhawk to indemnify and defend Simon, including attorneys' fees. On March 16, 2022, the district court granted summary judgment of noninfringement, and its August 22, 2022 amended final judgment denied as moot "[a]ll counterclaims or other claims and motions by any party not previously ruled on." The Federal Circuit affirmed the noninfringement judgment in 2024.

On September 19, 2022, Simon filed a motion, styled under Rules 54(b) and 60(a), seeking a declaration that the amended judgment had not mooted its indemnification claim. In a September 2024 order, the district court rejected Simon's argument that the claim was not moot, while clarifying that the dismissal was without prejudice. Simon appealed.

The holding

The panel of Judges Dyk, Prost, and Cunningham, in an opinion by Judge Dyk, applied Fifth Circuit law and rejected Blackhawk's argument that Simon's only remedy would have been an appeal from the August 2022 amended final judgment, which would now be untimely. Construing the motion by its substance, the court held that it was a Rule 60(b) motion, and that Rule 60(b)(1), which under Kemp v. United States, 142 S. Ct. 1856 (2022), covers a judge's errors of law, was available because Simon filed within the time for appeal. "[W]e have no doubt that dismissal on grounds of mootness was improper," the court wrote, because the parties had, and still have, a continuing controversy over the right to indemnification. Denying the motion was therefore an abuse of discretion.

The court did not reinstate the claim. At oral argument Simon said it would not object to dismissal without prejudice under 28 U.S.C. 1367(c), given tolling under 28 U.S.C. 1367(d), and Blackhawk urged that a dismissal for lack of supplemental jurisdiction was appropriate. Without deciding whether the Fifth Circuit's test for discretionary dismissal of pendent state-law claims was met, the court vacated and remanded with instructions to dismiss the indemnification claim without prejudice under section 1367(c). It awarded no costs. The decision is nonprecedential.

The fee ruling

Separately, in a memorandum order signed September 16, 2026, Magistrate Judge Roy S. Payne granted the motion for attorneys' fees and costs filed by Simon Property Group (Texas), L.P. and Blackhawk's motion for fees and sanctions. The motions invoked 35 U.S.C. 285, 28 U.S.C. 1927, Rule 11, and the court's inherent power; the order's finding is under section 285, that AlexSam's litigation conduct was "exceptional" "for all claims of the '608 patent since filing." No amount has been fixed. The order directs the defendants to provide a detailed fee accounting within 30 days, confer with AlexSam's counsel, and, absent agreement, move to fix fees.

What to watch next

Watch for the mandate, the district court's dismissal order on remand, and the proceedings to fix the fee award.