exceptional circumstances Archives

Settlement wipes out exceptional-case fee award in exceptional fashion

The US Court of Appeals for the Third Circuit granted the parties’ joint motion to vacate a district court’s attorneys’ fee rulings after the parties settled while the second fee appeal was pending. The Court concluded that the case presented the rare “exceptional circumstances” warranting vacatur after mootness resulting from settlement. Lontex Corp. v. Nike, Inc., Case Nos. 24-3284; -3358 (3d Cir. Aug. 20, 2026) (Chagares, C.J.; Freeman, Bove, JJ.)

The appeals arose from fee proceedings following the Third Circuit’s earlier decision in Lontex v. Nike (2024). There, the Court addressed the standard for determining whether a trademark case is “exceptional” for purposes of awarding attorneys’ fees and remanded for further proceedings. On remand, the district court again found the case exceptional and awarded Lontex attorneys’ fees and costs. Nike appealed, and Lontex cross-appealed.

After oral argument and mediation, the parties settled and jointly sought vacatur of the district court’s fee rulings. The Third Circuit emphasized that settlement alone does not warrant vacatur. Because judicial decisions are presumptively correct and may have value beyond the immediate parties, vacatur following settlement remains an extraordinary equitable remedy requiring exceptional circumstances.

The Third Circuit found such exceptional circumstances in this case. Most importantly, the challenged decisions applied the legal standard established in the Third Circuit’s precedential 2024 decision in the case, which remains intact. The public therefore retained the benefit of the appellate decision establishing the governing legal principles, reducing the public interest in preserving the district court’s application of those principles on remand. Both parties also challenged the district court’s rulings, and the settlement (reached following court-encouraged mediation) conserved further judicial resources.

Balancing those considerations, the Third Circuit concluded that the benefits of settlement outweighed the remaining public interest in preserving the district court’s rulings. The case therefore presented the unusual circumstances in which vacatur following settlement is appropriate.

USPTO extends deadline for requesting director review of decisions instituting trial

The United States Patent and Trademark Office (USPTO) updated its director review process by extending the deadline for requesting director review of decisions made in Patent Trial & Appeal Board proceedings from 14 to 30 days.

Under 37 C.F.R. § 42.75(c)(1), a request for director review must be filed within the time period set forth in 37 C.F.R. § 42.71(d), unless the director grants an extension for good cause. Section 42 generally requires that a request for director review be filed within 14 days of a decision instituting trial or 30 days of a final decision or a decision denying institution.

In a precedential order in Light & Wonder, Inc. v. Evolution Malta Ltd., IPR2025-01072, Paper 30 (Director June 22, 2026), however, the director waived the 14-day deadline and extended it to 30 days. The USPTO has now incorporated that change into its published director review process.

The updated process explains that the deadline may be extended in exceptional circumstances, provided that “the trial has not progressed meaningfully.” Examples of exceptional circumstances include:

Dismissal of all or substantially all claims in co-pending litigation
Findings of fact and conclusions of law rendering all or substantially all challenged claims invalid in litigation
Violation of a Sotera stipulation

Parties seeking an extension based on exceptional circumstances must email Director_PTABDecision_Review@uspto.gov, copy counsel for all parties, and explain in three sentences or fewer why an extension is warranted. The remaining parties will then be given an opportunity to respond.