Magistrate Judge Vera M. Scanlon (E.D.N.Y.) recently recommended that, inter alia, Defendant Mastercard’s motion for judgment on the pleadings based on Plaintiff’s failure to abide by an agreement be granted. Alexsam, Inc. v. Mastercard Int’l Inc., No. 15 Civ. 2799 (E.D.N.Y. Aug. 15, 2025).
On May 8, 2005, AlexSam and Mastercard entered into a patent licensing agreement (the “Agreement”) relating to card transaction systems where Mastercard was required to provide a monthly report of “Licensed Transactions” that formed the base of royalty payments. Id. at *6–7. On May 14, 2015, AlexSam filed a complaint alleging that Mastercard underreported the number of Licensed Transactions and thus failed to pay the proper royalty amounts. Id. at *7. However, the Agreement contained a covenant not to sue that was in effect at all times prior to the Agreement’s termination. As such, AlexSam could only sue after the Agreement was properly terminated. Id. However, the Court found that AlexSam sued before the Agreement was terminated and thus granted the dispositive motion. Id. at *15.
In its analysis, the Court evaluated the five ways in which the Agreement could be terminated: (1) upon expiration of the Licensed Patents; (2) upon a court of competent jurisdiction holding the Licensed Patents’ claims to be invalid or unenforceable; (3) upon a court of competent jurisdiction holding the Licensed Patents to be not applicable to Licensed Transactions similar to those actually being made, used, or sold by or for Mastercard; (4) upon Mastercard exercising any right to terminate the Agreement; and (5) upon either party breaching any material provision of the Agreement. Id. at *9–13.
First, the Court determined that the patents expired on July 10, 2017, which was after AlexSam had filed its complaint. Id. at *9. The Court then determined that neither party argued that the agreement had terminated due to (2) a finding from a court of competent jurisdiction and that (4) Mastercard itself did not terminate the Agreement. Id. at *10–13. With regard to the third way to terminate, AlexSam argued that the Federal Circuit previously held that the patents were “not applicable to Licensed Transactions similar to those actually being made, used, or sold by or for Mastercard.” Id. at *10 (citing Alexsam, Inc. v. IDT Corp., 715 F.3d 1336 (Fed. Cir. 2013)). The Court, however, disagreed because the Federal Circuit only addressed one of the patents, not all of them. Id. at *12. With regard to the last way to terminate—breach—the Court was persuaded by the Agreement’s requirement of a “notice-to-cure” provision that required AlexSam to provide notice to Mastercard of any alleged material breach and give them the opportunity to cure. Id. at *14–15. Because AlexSam did not provide such notice to Mastercard, the Court found that the Agreement did not terminate due to Mastercard’s alleged material breach. Id. at *15. Since the Agreement was not terminated before AlexSam filed its complaint, the Court recommended that Mastercard’s motion for judgment on the pleadings be granted. Id.
The case is Alexsam, Inc. v. Mastercard Int’l Inc., No. 15 Civ. 2799 (E.D.N.Y. Aug. 15, 2025).
