Alexsam, Inc. v. Mastercard Int’l Inc. — Case Closed

On October 5, 2020, United States District Judge I. Leo Glasser (E.D.N.Y.) denied plaintiff Alexsam, Inc.’s (“Alexsam”) motion for reconsideration of the court’s June 17, 2020 summary judgment ruling.

Alexsam sued defendant Mastercard International Inc. in May 2015, alleging that Mastercard failed to pay royalties owed under a 2005 patent license agreement.

The company procedure claimed by the patents lets prepaid cards like phone cards, gift cards, and healthcare cards to be processed on equipment normally employed for charge card transactions. Along with claiming counterclaims, Mastercard petitioned the Patent Trial and Appeal Board (the”PTAB”) for a covered business strategy report on the patents. Even the PTAB refused Mastercard’s request, but agreeing with Alexsam that as the licensing agreement included Alexsam’s “covenant not to sue, so” there wasn’t any chance that Alexsam can bring an infringement actions against Mastercard, and for that reason, Mastercard lacked standing before the PTAB. From the courtroom June 17, 2020 judgment, Judge Glasser maintained that Alexsam’s disagreements before the PTAB — which the arrangement covenant not to sue withdrew Mastercard of status to seek declaratory relief — supposed Alexsam had been judicially estopped from seeking royalty obligations.

Alexsam contended that the court’s finding of judicial estoppel should not be retroactive, i.e., should not preclude Alexsam from looking for royalties which accrued before the patents expiring. The court rejected this argument, finding that “judicial estoppel isn’t restricted by any philosophy of retroactivity.” The court rejected Alexsam’s debate that judicial estoppel could “over reward” Mastercard: in the place of simply eliminating royalties ahead to Mastercard’s filing of its answer, “Alexsam is judicially estopped from chasing all royalties made of the date which Mastercard stopped payment of royalties and also provided the proper notice .”

Case: Alexsam, Inc. v. Mastercard Int’l Inc., 15-CV-2799 (ILG) (SMG) (E.D.N.Y. Oct. 5, 2020).