# United States **Court of Appeals**  **for the Federal Circuit**

______________________ MADSTAD ENGINEERING, INC. AND MARK STADNYK, Plaintiffs

- Appellants,

v.

UNITED STATES PATENT AND TRADEMARK OFFICE, MICHELLE K. LEE, DEPUTY DIRECTOR , UNITED STATES PATENT AND TRADEMARK OFFICE, AND UNITED STATES, Defendants

- Appellees.

______________________

2013

- 1511,

- 1512

______________________ Appeal from the United States District Court for the Middle District of Florida in No. 12

- CV

- 1589, Judge Steven D. Merryday.

______________________

Decided: July 1, 2014

______________________

J ONATHAN S. M ASSEY , P.C., Massey & Gail LLP, of Washington, DC, argued for plaintiffs

- appellants.

M ARK R. F REEMAN , Attorney, Appellate Staff, Civil Division, United States Department of Justice, of Was hington, DC, argued for defendants

- appellees. With him on the brief were S TUART F. D E LERY , Assistant Attorney General, A. L EE B ENTLEY , III, Acting United States Atto r-MADSTAD ENGINEERING , INC

. v. USPTO 2

ney, and S COTT R. M C I NTOSH , Attorney. Of counsel on the brief were N ATHAN K. K ELLEY , Deputy General Counsel for Intellectual Property Law and Solicitor, S COTT C. W EIDENFELLER and A MY J. N ELSON , Associate Solicitors, United States Patent and Trademark Office, of Alexa ndria, Virginia.

______________________
Before N EWMAN , O’M ALLEY , and W ALLACH , Circuit Judges.

O’M ALLEY , Circuit Judge.
In this constitutional challenge, Mark Stadnyk and MadStad Engineering, Inc. (collectively, “MadStad”) filed suit against the United States Patent and Trademark Office (“PTO” ), its then director, David Kappos, in his official capacity

, and the United States of America (colle ctively, “ the G overn ment ”) in the United States District Court for the Middle District of Florida. MadStad Eng’g, Inc. v. U.S. Patent & Trademark Office , No. 8:12

- cv

- 1589, ECF No. 1 ( July 18, 2012 ). MadStad sought a declaratory judgment that the “first

- inventor

- to

- file” pro vision of the Leahy

- Smith America Invents Act (“AIA”)

, Pub. L. No. 112

- 29
, § 3, 125 Stat. 284, 285

– 294 (2011) is uncon stit utional and a permanent injunction barring enforcement of the AIA.

The district court granted the G overnment’s motion to dismiss for lack of standing. MadStad Eng’g, Inc. v. U.S. Patent & Trademark Office , No. 8:12

- cv

- 1589, 2013 WL 3155280 (M.D. Fla. May 8, 2013). MadStad appeals this dismissal and requests that we declare the AIA to be unconstitution al

. For the reasons explained below, we affirm the district court’s finding that MadStad lacks standing to challenge the AIA in this action; we therefore do not reach MadStad’s constitutional arguments

.MADSTAD ENGINEERING , INC

. v. USPTO 3

I. B ACKGROUND On September 16, 2011, the President signed into law the AIA. T he AIA

, inter alia

, adopted the “ first

- inventor

to

- file ” principle for determining priority among patents and patent applications. AIA § 3, 125 Stat. at 285

– 294

. Before the AIA, the United States typically gave priority to the first to invent. 1 Under the AIA, however, priority will go to the first inventor to file a patent application

. The named inventor must have invented the invention independently and not derive d the idea from another. See 35 U.S.C. § 102 (2012).
On July 18, 2012, MadStad filed suit in the United States District Court for the Middle District of Florida

, alleging that the first

- inventor

- to

- file provision of the AIA is unconstitutional under Article I, Section 8, Clause 8 of the Constitution and that the cha llenge d provision was not severable from the remainder of the Act

. The co mplaint sought a declaration that the entirety of the AIA is unconstitutional and a permanent injunction barring its enforcement.

T he parties agreed that no material issues of fact were in debate and that MadStad’s claim could be r esolved as a matter of law . Mr. Stadnyk is a resident of Florida and the named inventor o n three patents. 2 His company, MadStad Engineering, is a Florida corporation that develops and markets his inventions. Mr Stadnyk submitted an unchallenged declaration in support of his

1 There were some exceptions to this general rule. See 35 U.S.C. § 102(g) (2006) ( stating that , if the first inventor abandoned, suppressed, or concealed the inve ntion , the second inventor would get priority ); Gayler v. Wilder , 51 U.S. 477, 496

– 98 (1850) ( same ). But it r emained the governing principle nonetheless.

2 See U.S. Pat. Nos. 7,458,626; 7,832,783; 8,118,511.MADSTAD ENGINEERING , INC

. v. USPTO 4

claimed standing to pursue his challenge to the AIA

. After considering the parties’ submissions

, the district
court dismiss ed the action for lack of standing

, without oral argument or an evidentiary hearing

. MadStad , 2013 WL 3155280, at *7.
MadStad timely appealed

, arguing that the district court erred in h olding that the plaintiffs la ck standing to challenge the constitutionality of the AIA

. Thus , Ma dStad argue s that we should address the merits of its claim and find the first

- inventor

- to

- file provision of the AIA , and the AIA in its entirety, unconstitutional.

II. D ISCUSSION
We fi rst discuss whether we are authorized to decide this case under Article III.

A. Jurisdiction

N either party dispute s this court’s jurisdiction over this appeal under 28 U.S.C. § 1295(a) (1) (2012). A s a court of limited jurisdiction, however, we still must a ddress this issue. See Bender v. Willia m sport Area Sch. Dist. , 475 U.S. 534, 541 (1986) ( “Federal courts are not courts of general jurisdiction; they have only the power that is authorized by Article III of the Constitution and the statutes enacted by C ongress pursuant thereto . . . . For that reason, every federal appellate court has a special obligation to satisfy itself . . . of its own jurisdi ction.” (citation omitted) ). Indeed, MadStad itself was sufficiently unsure of whether this court possesses juri sdiction over this matter that it filed a protective appeal in the United States Court of Appeals for the Eleventh Circuit soo n after initiating this appeal. See Appellant’s Br. 1 –2. The Federal Circuit has exclusive jurisdiction over appeals “from a final decision of a district court . . . in any civil action arising under , or in any civil action in which a party has asserted a compulsory counterclaim arisingMADSTAD ENGINEERING , INC

. v. USPTO 5

under, any Act of Congress relating to patents.” 28 U.S.C. § 1295(a)(1) (emphasis added)

. 3 Because MadStad does not assert a claim under the AIA and, instead asserts a claim directly under the constitution challenging the AIA’s constitutionality, we must determine whether MadStad’s claims “arise under” an Act of Congress rela ting to patents as that jurisdictional principle has been interpreted by the United States Supreme Court. The Supreme Court’s “arising under” jurisprudence has developed in cases assessing whether a case sufficiently arises under federal law to authorize federal
courts to exercise jurisdiction over the claims asserted. See Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg ., 545 U.S. 308 , 314

– 15 (2005) ( establishing federal jurisdiction where the interpretation of a federal statute was essential to the state law cla im ). Thus, the Court has on a number of occasions assessed whether a claim arise s only under state law or, alternatively, involves a sufficiently substantial federal issue to justify federal jurisdi ction or

— where patent

- related issues are involved —even pr eempt state court jurisdiction over a ma t ter. See, e.g.

, Gunn v. Minton

, __ U.S. __, 133 S. Ct. 1059, 1068 (2013) ( holding that malpractice claims, based on an attorney’s han dl ing of a patent case, are not subject to exclusive jurisdiction of federal cour ts ). While resolution of these questions has, at times, resulted in a conclusion that a regional circuit Court of Appeals, rather than this Circuit, properly would have jurisdiction over the appeal at issue, that conclusion still turned on whether the que stion presented was one of state law cognizable in federal court only by virtue of its diversity jurisdiction, or one arising under the patent laws. See Christianson v. Colt Indus.

3 We note that the AIA also changed Section 1295. See AIA § 19 , 125 Stat. at 3 31

– 32. These changes, howe ver, do not affect our jurisdiction over this appeal.MADSTAD ENGINEERING , INC

. v. USPTO 6

Operating Corp.

, 486 U.S. 800, 817 (1988) ( holding that the appeal belonged before the regional circuit because the claims did not arise under patent law ); cf . 28 U.S.C. § 1295 (establishing jurisdiction in the Federal Circuit when there is a “compulsory counterclaim arising under” patent law).
The Supreme Court has not had occasion to determine whether a claim attacking the constitutionality of an Act of Congress relating to patents is one ar i sing under that Act of Congress within the meaning of 28 U.S.C. §§ 1295 and 1338. It appears , moreover, that we have faced this question only once . In Patlex Corp. v. Mossinghoff , 758 F.2d 594 (Fed. Cir. 1985) , we considered whether “certain provisions of the patent reexamination statute and i mplementing regulations” were unconstitutional under the Fifth a nd Seventh Amendments of the United States Constitution. 758 F.2d at 596 . While, as here, appeals from the trial court’s resolution of their claims were originally asserted in both the relevant regional circuit

— the Third Circuit

— as well as this one , the Third Circuit dismissed its appeal upon motion that the appeal was properly brought in the Federal Circuit

, and we proceeded to decide the matter. See id . at 598 n.5. We did so wit hout analysis of the jurisdictional question, however. 4
Upon consideratio n, we conclude that jurisdiction over th is appeal lies properly in this court. As the Supreme Court has made clear in other contexts, a matter can still “arise under” an Act of Congress even when the claim “finds its origin” in other legal predicates. Se e Gunn

, 133 S. Ct. at 1064 . While the Supreme Court has not a d4 In Brooks v. Dunlop Manufacturing Inc. , 702 F.3d 624 (Fed. Cir. 2012), we addressed the constitutionality of another portion of the AIA, but this court unquestionably had j urisdiction based on the other claims in the case. 702 F.3d at 626

– 28.MADSTAD ENGINEERING , INC

. v. USPTO 7

dressed whether a claim which finds its origin in the United States C onstitution can also be said to arise under a federal statute for jurisdictional purposes, we believe the Supreme Court’s ju risprudence counsels in favor of the conclusion that, in this case, it does. 5 When assessing when a state law claim can be said to arise under federal law, the Supreme Court considers “if a federal issue is : (1) necessarily raised, (2) actually dispu ted, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal

- state balance a pproved by Congress.” Id

. at 1065. While not perfectly translatable to the question before us, these guideposts are helpful. First, a resol ution of the constitutional challenge here would require this court to interpret the terms “inventor” and “first

- inventor

- to

- file” under the AIA and to assess the interactions between those terms and the use of the term “ Inventor ” in the Intellectual Prope rty Clause of the United States Constitution

— Article I, Section 8, Clause 8. It will also cause us to address the scope of protections afforded to “ inventors ” by the right to bring derivation actions encompassed within the first

inventor

- to

- file provision of the AIA.
Second, a review of the parties’ briefs, both on the merits and with re sp ect to the standing question, makes clear that these matters are at the heart of the parties’ dispute. If MadStad is to be believed, moreover, they are

5 It is not surprising that the Supreme Court has not yet addressed this question. Outside the context of patent law, the precise federal origin of a claim is largely irrelevant sinc e it is the fact that the claim originates in something that gives rise to federal subject matter juri sdiction

— the Constitution, laws, or treaties of the United States— that resolves any jurisdictional doubts. Even in the patent arena, it is only at the Ap pellate level that this unusual jurisdictional issue arises.MADSTAD ENGINEERING , INC

. v. USPTO 8

certainly subst antial to the current state of patent law; a resolution in MadStad’s favor would not only result in a declaration that the first

- inventor

- to -f ile provision of the AIA is unconstitutional and, unenforceable, but could compel the conclusion that the entirety of the AIA falls along with that alleged defective provision. This is pr ecisely the type of issue the Supreme Court classifies as substantial in the relevant sense: “[t]he substantiality inquiry under Grable looks instead to the importance of the issue t o the federal system as a whole.” Gunn , 133 S. Ct. at 1066. Indeed, in Grable , the Court described a state claim challenging the constitutionality of gover nment action as the “classic example” of a claim which, though having its origin in state law, aris es under federal law for jurisdictional purposes. Grable , 545 U.S. at 312 (referring to Smith v. Kan

. City Title Trust Co ., 255 U.S. 180 (1921), where state plaintiff’s claim called into que stion the constitutional validity of an Act of Congress).
Finally , to the extent Congress has attempted to “ba lance” the matters committed to the jurisdiction of this court and those committed to the regional circuits, we believe that balance would be upset by placing jurisdi ction over interpretations of the AIA and an assessment of its constitutional validity in the hands of any circuit other than this one. Through 28 U.S.C. § 1338(a) , Congress placed the resolution of actions arising under an Act of Congress relating to patents exclusively within the fede ral courts. Through 28 U.S.C. § 1295(a)(1), Congress placed appeals from such matters exclusively within the province of the Federal Circuit. The importance of the matters raised by MadStad’s complaint to the continued uniform application of the patent laws is clear.
For these reasons, we find, as we did impliedly in Pa tlex , that MadStad’s claims and this appeal “arise under” an A ct of Congress relating to patents within the meaningMADSTAD ENGINEERING , INC

. v. USPTO 9

of both 28 U.S.C. § § 1338 and 1295(a)(1) and that we, thus, may properly exercise jurisdiction over this appeal. 6

B. Standing

Alt hough we have statutory jurisdiction over its a ppeal , MadStad must have standing under Article III to assert that claim before we may reach the merits. To satisfy the minimum standing requirements of Article III, a party must demonstrate an injury in fact that is: (1) “concrete, particularized, and actual or imminent” ; (2) “fairly traceable to th e challenged action” ; and (3) “redressable by a favor able ruling.” Monsanto Co. v. Geer tson Seed Farms

, 561 U.S. 139

, 149 (2010). The party invoking federal jurisdiction has the burden of establis hing each of these elements. Lujan v. Defenders of Wildlife

, 504 U.S. 555, 561 (1992). Standing is a jurisdic tional question whose resolution we review de novo

. Id. at 560

– 561

. The Supreme Cou rt recently addressed when a party has standing to challenge , pre -enforcement, the constit utionality of governmental regulation; indeed, it has done so twice. In the 2013 term, the Supreme Court decided Clapper v. Amnesty International USA , __ U.S. __, 133 S. Ct. 1138 (2013) and, at the end of its current term, the Court decided Susan B. Anthony List v. Driehaus , No. 13

- 193, 2014 WL 2675871, at *5 (June 16, 2014). We turn first to Clapper because that is the decision upon which the district court premised its judgment. There, “atto r6 In addition, because the upshot of MadStad’s claim is that the pre

- AIA version of the Patent Act was never constitutionally amended, and thus, should conti nue to govern patent applications, it is arguable that his claims can be said to arise directly under the 1952 Patent Act. In either case, it is clear that this Court of Appeals has jurisdiction over its appeal.MADSTAD ENGINEERING , INC

. v. USPTO 10

neys and human rights, labor, legal, and media organiz ations whose work allegedly requires them to engage in sensitive and sometimes privileged telephone and e

- mail communications with colleagues, clients, sources, and other individuals located abroad” (collectively, “Amnesty”) brought a constitutional challenge to the Foreign Intell igence Surveillance Act (“FISA”). 133 S. Ct. at 1145. Con gress had amended § 1881a of FISA to allow the Government to acquire intelligence from any non

- U.S. person reasonably believed to be located outside the U.S.

, without requiring authorization by an Article III judge based on a finding of probable cause

. S ee 50 U.S.C. § 1881a (2012); Clapper , 133 S. Ct. at 1144. Amnesty alleged that some of their foreign contacts were likely subject to surveillance under the amended FISA. Accor ding to Amnesty, the threat of surveillance under this amendment will force them to travel abroad to have in

person conversations and undertake other costly measures to protect the confidentiality of sensitive co mmunications. Clapper , 133 S. Ct. at 1145

– 46. The Supreme Court held that Amnesty di d not have standin g to assert a consti tutional challenge to FISA because its argument rested on its speculative, subjective fear that:
(1) the Government will decide to target the communications of non

- U.S. persons with whom they communicate; (2) in doing so, the Gover nment will choose to inv oke its authority under § 1881a rather than utilizing another method of surveillance; (3) the Article III judges who serve on the Foreign Intelligence Surveillance Court will conclude that the Government’s proposed surveillance procedures satisfy § 1881a’s many safeguards and are consistent with the Fourth Amendment; (4) the Government will succeed in intercepting the communications of [Amnesty’s] contacts; and (5) [ Amnesty ] will be [a] part[y] toMADSTAD ENGINEERING , INC

. v. USPTO 11

the particular communications that the Gover nment in tercepts.

Id . at 1148. Because it found e ach of these steps highly speculative and contingent on specific choices by the Government, the FISA Court, and Amnesty itself , the Supreme Court “decline[d] to abandon [its] usual relu ctance to endorse standing theories that rest on specul ation about the decisions of independent actors.” Id . at 1150. MadStad asserted standing below, arguing that it “has numerous inventions at different stages of develo pment” and the AIA: (1) forces MadStad to enhance co mputer security to protect against an increased threat of computer hacking and theft of its intellectual property (“IP”); (2) increases the time and effort required to file extra patent applications; (3) puts MadStad at a compet itive disadvantage with larger compani es; and (4) causes MadStad to lose business and investment opportunities for fear of IP theft. MadStad , No. 8:12

- cv

- 1589, ECF No. 1, at 8– 12; see MadStad Eng’g, Inc. v. U.S. Patent & Trademark Office , No. 8:12

- cv

- 1589, ECF No. 30, at 2– 10 (Sep. 28, 2012)

. 7

7 MadStad argues that the district court only co nsidered its first alleged injur y in its order dismissing the

case. [JA12

– 14] . We disagree. The district court’s analysis clearly applied to each of MadStad’s arguments, even if it treated them collectively. See, e.g.

, MadStad

, 2013 WL 3155280, at *6 (“ The same line of reasoning serves to classify as neither certain nor impending the array of ‘counter

- measures’

— the third

- party contracting for samples, the prophylactic filing of defensive patent applications, and other contingent items

— featured by the plaintiffs in an attempt to de monstrate causation and standing .”).MADSTAD ENGINEERING , INC

. v. USPTO 12

T he district court rejected MadStad’s assertion of standing, relying on Clapper

. The lower court concluded:
In each case, the plaintiffs responded to a felt need to expend money to avoid entirely hypothe tical consequences of legislation, that is, in each case the plaintiffs expended funds in response to an entirely subjective and self

- actuated trepid ation about conjectural events. In each case, act ualization of the conjectural events depends upon the contingent action of a third party . . . . In ea ch case, the expenditures in anticipation of these co njectural events are controlled entirely by the judgment and discretion of the plaintiffs . . . .

MadStad , 2013 WL 3155280, at *6. In other words, t he district court found that, in order for MadStad to actually suffer any injury fairly traceable to the AIA, an “acutely attenuated concatenation of events” was required. Based on this finding, t he district court determined that Ma dStad failed to prove that any injury was actual or imm inent under Clapper an d therefore lacked standing to challenge the constitutionality of the AIA. Id

. On appeal, MadStad contends that the district court’s reliance on Clapper was misplaced because the threats of harm upon which it relies are far less speculative than those a sserted in Clapper

. It also asserts that it faces a sufficient “substantial risk” of suffering the injuries it identifies to satisfy Article III standing under traditional standing principles which the Clapper Court did not expressly reject.

1. MadStad’s alleged harms

We review each of Mad Stad’s alleged injuries in turn to determine whether they are sufficient to support the minimum requirements for Article III standing , individ ually or collectively.MADSTAD ENGINEERING , INC

. v. USPTO 13

a

. Increased r isk of computer hacking
MadStad allege s that it has been forced to increase its computer security because the AIA has made it more attractive and profitable for computer hackers to steal IP and file their own patents. Because MadStad claims it has already expended money to enhance its security in response to this alleged increased threat , it argue s that it has suffered redressable injury directly caused by the AIA. MadStad , No. 8:12

- cv

- 1589, ECF No. 1

, at 8– 9.

The district court found that this scenario was too far

fetched because it assumes too much. Specifically

, the trial court found that

, to conclude that MadStad’s need to undertake additional security measures is tracea ble to the AIA, it wo uld have to assume that, (1) although knowing of hacking threats to its intellectual pro perty generally, MadStad would not have acquired, installed, and opera ted the available state -of- the

- art security, regardless of the AIA, ( 2) thieves will successfully hack MadStad’s compu ters and discover patentable IP, (3) those thieves would apply for a patent before MadStad does so, (4) the thieves would succeed in receiving a patent, and (5) they would be abl e to disguise their theft so as to defeat a challenge by MadStad in a derivation proceeding

. MadStad , 2013 WL 3155280, at *6.
On appeal, MadStad argues that the district court i ncorrectly assumed that it would not purchase additional security equipment because of the AIA . MadStad co ntends that it has already suffered injury attributable to the AIA because it did purchase and implement enh anced security measures after the passage of the AIA . MadStad further insists that the district court incorrectly assumed that computer hacking is an “ exotic scenario. ” MadStad contends that it detects intrusions on its system every week and points to a number of statistics that indicate computer hacking is prevalent in the United States

.MADSTAD ENGINEERING , INC

. v. USPTO 14

MadStad’s arguments miss the mark . In order to e stablish standing, the injury must be, inter alia , “fairly traceable to the challenged action.” Monsanto

, 561 U.S.
at 149

. The point of the district court’s analysis was not to downplay the risk of hackers, but to emphasize all of the unlikely steps required for MadStad to suffer injury fairly traceable to any alleged increased risk of hacking caused by the AIA. See MadStad , 2013 WL 3155280, at *6. The mere fact that MadStad, like all other people and companies, faces cyber threats does not create standing. In fact, MadStad cites statistics that indicate hacking was a growing threat well before the AIA was even enac ted

. Thus, even if the AIA were never enacted

, it is clear that MadStad would still be at risk from the “weekly” attacks on its computer system, giving it incentive to install the best protection against such attacks that is available. Indeed, as MadStad admits, it had computer security systems in place well before the AIA. Oral A rgument at 3:47, MadStad Eng’g, Inc. v. U.S. Patent & Trademark Office , 2013

- 1511, available at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20 13

- 1511.mp3 (“[MadSta d] does have some [computer] security.”). Even accepting the proposition that MadStad did choose to install heightened security in response to the AIA, w e see nothing in the record that indicates that, in response to the AIA, hackers would start launching cyber

- attacks which MadStad’s old security system could not handle, but the upgraded system could

. See Clapper

, 133 S. Ct. at 1148. T he alleged in creased threat is, thus, solely based on speculation about the capabilities and incentives of illegal hacke rs. These assumptions are not enough to create standing. See id. at 1152 (“Another reason that respondents’ present injuries are not fairly traceable to [the Act] is that even before [the Act] was enacted, they had a similar incentive to engage in many of the countermeasures that they are now taking.”) . As the trial c ourt concluded, MadStad’s standing claim is “dilu t-MADSTAD ENGINEERING , INC

. v. USPTO 15

ed” by the fact that it is unlikely that MadStad

, “ with or without the AIA [,] would not avail itself to the state -ofthe

- art computer security to defend against the persi stence and threatening hacking of IP thieves.” MadStad

, 2013 WL 3155280, at *6. Even if cyber

- attacks were to increase because of the AIA, moreover, MadStad has not presented any evidence that, because of the AIA, there will be an increase in successful cyber

- attacks orchestrated to steal a company’s IP so that a hacker can quickly file a patent on that IP

. Thus, e ven assuming that the AIA “creates an unpara lleled reward system for corporate espionage and hacking,” Appellant’s Br. 33 , the belief that there will be an i ncrease in successful cyber

- attacks attributable to the AIA still rests on speculation about the illegal decisions of independent actors. See Clapper , 133 S. Ct. at 1150 (“We decline to abandon our usual reluctance to endorse stan ding theories that rest on speculation about th e decisions of independent actors.”)

. In other words, the alleged injury that is “fairly attributable” to the AIA

— the potential increased risk of successful cyber

- attacks in a first

inventor

- to

- file system

— is predicated solely up on the unsupported assumption that hackers, in response to the AIA, will increase efforts to illega lly steal IP by launching more cyber

- attacks for the precise purpose of p rosecuting a patent thereon

. Again, b ecause t his alleged injury is dependent up on the hypothetical, il legal decisions of independent actors, it is not “concrete, particularized, and actual or imminent.” Monsanto

, 561 U.S. at 149 ; see Clapper , 133 S. Ct. at 114 8 (“ Yet respondents have no actual knowledge of the Government’s § 1881a targeting practices. Instead respondents merely speculate and make assumptions about whether their communications with their foreign contacts will be acquired under § 1881a .” ).
Finally, e ven assuming that the AIA leads t o an i ncrease of cyber

- attacks , that those attacks are succ essful,MADSTAD ENGINEERING , INC

. v. USPTO 16

and that one of those attacks allows a hacker to steal MadStad’s IP for the intended purpose of obtaining a patent thereon , that hacker would still have to interpret all of MadStad’s data , finish developing the product to a point where it can be pa tented, successfully file for a patent, and prosecute that application successfully

, all before MadStad can file its own patent application

. As MadStad emphasizes

, filing for a patent is not a quick, easy, inexpens ive process

. See Joint Appendix (“J.A.”) 25 (“Each patent application costs approximately $10,000 for minimally complex products.”); Appellant’s Br. 20

. Each of these required steps only makes the alleged injury more attenuated and less imminent. See Clapper , 133 S. Ct. at 1147 (“Although imminence is concededly a som ewhat elastic concept, it cannot be stretched beyond its purpose, which is to e nsure that the alleged injury is not too speculative for A rticle III purposes

— that the injury is certainly impending.” (quoting L ujan , 504 U.S. at 564 n.2) (emphasis in original)).

Given these circumstances , we find that the district
court did not err in concluding that, under Clapper

, MadStad failed to establish standing arising from the alleged increased risk of hacking caused by the AIA or any expenditures MadStad may have made in cyber security because of that perceived risk

. b . Increased time and effort to file additional patent applications

MadStad next argues that it is injured by the AIA b ecause the Act forces it “to divert business resources to prepare more patent applications and file them sooner, in order to compete in the race to the PTO.” Appellant’s Br. 21

. MadStad contends that, although large companies can easily absorb the additional cost, small compani es do not have the resources necessary to file additional patent applications to prevent another from filing for the same patent first.MADSTAD ENGINEERING , INC

. v. USPTO 17

We , of course, turn to the record to determine whether MadStad personally has suffered actual or imminent injury becau se of the AIA. MadStad argues that Mr. Stadnyk is an inventor who has patented inventions in the past and that he inte nds to continue

— and is, in fact continuing

— researching and developing new inventions

, which he would then patent. See Appellant’s Reply 4–5 ; see also J.A. 62

– 63

. Because he is now operating under the first

- inventor

- to

- file system of the AIA, MadStad asserts that Mr. Stadnyk will be forced to move that process more quickly and file applications for patent s on his inventions at an earlier point in the process than he might otherwise desire to do.
As the Government points out, however, MadStad has not asserted that he has filed any recent patent applic ations (i.e., after the March 16 , 2013 effective date of the first

- inventor

- to

- file provisio n) and does not point to any particular invention he claims is ready for patenting. The Government argues, moreover, that, in order to establish standing, MadStad must not only have an invention that is ready for patenting and file an application for a patent on that invention, but must also be faced with a rejec tion based on an earlier filed application on that same inve ntion and lose a derivation proceeding he initiates to cha llenge that earlier filing. See Oral Argument at 22:05, 24:35. 8

8 In its lower court brief, the Government specifica lly argued that, to establish standing, MadStad:
would have to establish that all of the following contingencies will occur: (1) Plaintiffs’ invention becomes “ patent able ” (2) only after the first

inventor

- to

- file provision take [s] effect in mid

March 2013; (3) Plaintiffs decide to seek a patent on that invention; (4) another party independentlyMADSTAD ENGINEERING , INC

. v. USPTO 18

MadStad says that the government requires too much

. MadStad points to a written declaration by Mr. Stadnyk where he explains :
T he Government has ra is ed a question as to whether my new (currently non

- patented) inve ntions will ultimately meet the necessary precond itions for obtaining a patent. I am operating on the assumption that they will meet the requir ements of patentability. I believe that some of my inventions are in fact close to patentability . I am contin uing to research, develop, and test my i nventions in preparation for filing patent applic ations. Certainly, prior to the AIA, I had every intention of patenting them. As a result of the enactment of the AIA, MadStad and I face i ncreased costs and burdens from having to operate in a First

- [Inventor -] to

- File environment.

J.A. 62

– 63 (emphas e s added). MadStad explains t hat “in the real world, small inventors face countervailing needs— to develop their inventions further, attract i nvestment, and persuade business partners that the inve ntion is viable.” Appellant’s Reply 6

. MadStad argues that, under the first

- to

- invent s ystem, small inventors are forced to file applications containing inadequate descri ptions of the inventions or insufficient testing data and, thus, are less likely to ripen into a patent, or less likely to ripen into a patent that actually is enforceable. And, MadStad claims that it is suffering current injury by its

invents the same invention (5) after Plaintiffs have invented it; and (6) the other party files for a patent (7) before plaintiffs do so, thereby securing the patent and foreclosing Plaintiffs’ application.
MadStad Eng’g, Inc. v. U.S. Patent & Trademark Office

, No. 8:12

- cv

- 1589, ECF No. 29, at 19 (Sep. 18, 2012)

.MADSTAD ENGINEERING , INC

. v. USPTO 19

need to “acquire and maintain additional equipment for product development and testing” so that it can speed up its inventive process, Appellant’s Br. 12 , by needing to hire attorneys at an e arlier point in time

, Appellant’s Reply 6

, and by needing to raise and expend money on applications which either might prove to be unsuccessful or need to be amended. Appellant’s Br. 12

– 13

. Given these business realities, MadStad asserts that it has show n sufficient probable economic injury to satisfy Article III’s injury

- in

- fact requirement for standing.
While we are not prepared to accept the Government’s characterization of what MadStad would need to show to establish standing

— and specifically do not agree that filing and losing a derivative action is a necessary prere quisite to standing to challenge the first

- inventor

- to

- file provision of the AIA

— we conclude that, on the record before us, MadStad has not established standing based on its fear of being forced into filing a patent application sooner than it would prefer or would normally do.

Mr. Stad ny k is admittedly speculating about whether his current research and development will result in a patentable invention

. Mr. Stadnyk admits that he still has more research, development, and test ing to do before he can file a patent application

, early or not . In other words, he currently has not filed , nor is he preparing to file

, a patent application in the first

- inventor

- to

- file system

. His declarations, mo reover, give no specific time frame in which he expects to file another patent applic ation, other than to abstractly say he “believe[s] that some of [his] inventions are in fact close to patentability.” J.A. 62

– 63. T hough Mr. Stadnyk has filed for patent applic ations in the past, merely testifying that he intends to file for another patent at some unknown point in the future is not enough to meet the “concrete, particularized, and actual or imminent” injury requirement. Monsanto

, 561 U.S. at 149 ; s ee Lujan , 504 U.S. at 564

– 65 (holding that professions of “‘som e day’ intentions

— without any d e-MADSTAD ENGINEERING , INC

. v. USPTO 20

scription of concrete plans or indeed even any specific ation of when the some day will be

— do not support a finding of the ‘actual or imminent’ in jury that our cases require”). We do not define exactly what steps a would

- be patent applicant would need to undertake to establish standing to challenge the first

- inventor

- to

- file provision of the AIA. We merely hold that, on the record before us, MadSta d has failed to establish standing based on its fear of the increased effort and costs involved in filing a patent application because it does not assert that Mr. Stadnyk has an invention for which an application could be filed.

c . Competitive disadvantag e relative to competitors

MadStad also asserts that the AIA puts it at “compe titive disadvantages (relative to larger competitors) from having to operate in a [ first

- inventor

- to

- file ] environment

, which puts a premium on the ability to file numerous expensive patent applications .” Appellant’s Br. 20

. Mad Stad contends that the AIA forces small entit ies to develop and test their products in

- house because sending developing products to outside vendors exposes them to IP theft. This requires small companies to divert some of their limited resources to set up and maintain these in

house development and testing centers , which l arger competitors alread y have in place

. In support of this claimed injury, MadStad points to testimony f rom inve stors and to statements of members of C ongress describing how the first

- inventor

- to

- file provision of the AIA, if passed, would place small businesses at a competitive disadvantage relative to larger competitors.

The Government responds that the patent system has always incentivized inventors to file quickly to preserve their rights

, to avoid the chance of an interfering applic ation, and to avoid the later claim of concealment or su ppression. The G overnment also points to the AIA’s creation of “d erivation proceedings” to allow an inventorMADSTAD ENGINEERING , INC

. v. USPTO 21

to demonstrate that an invention disclosed was imprope rly derived

— i.e., stolen from the inventor. Appellee’s Br. 29 (citing AIA § 3(i) (codified at 35 U.S.C. § 135 ) ).
Putting aside the protections derivation proceedings might provide patent applicants facing an earlier filing on the same invention, we find that MadStad’s argument that it is at a competitive disadvantage because it is forced to compete with larger competitors that have a greater ability to file numerous patent applications fails for many of the same reason s its argument that it is injured by having to file additional appl ications fail s

. MadStad has not asserted that it has, in fact, set up in

house research facilities which it did not have in p lace before the AIA and has not even alleged that it is engaged in a research project that would employ or make use of any such new facilities . Again, we find MadStad’s co ncerns too speculative and generalized to meet the “co ncrete, particularized, and ac tual or imminent” injury requirement. Monsanto

, 561 U.S. at 149 ; Lujan

, 504 U.S.
at 564

– 65. 9 MadStad’s argument that it is at a competitive disa dvantage relative to larger companies because it must divert resources to create in

- house development and
tes ting centers fails for additional reasons as well

. Like Ma d Stad’s argument regarding the increased risk of hacking, the actual injury fairly traceable to the AIA here is too speculative to be imminent. See Clapper

, 133 S. Ct.
at 1150. In order for MadStad to suffer injury that is fairly traceable to the AIA we would have to assume , at

9 We note, more over, that MadStad has alleged that it will be at a competitive disadvantage relative to larger competitors wi thout actually alleging that there are in fact larger entities against which its inventions compete that have “the ability to file numerous expensive patent applications

. ” Appellant’s Br. 20

.MADSTAD ENGINEERING , INC

. v. USPTO 22

least, that Ma d Stad’s outside vendors do not have ad equate security measures in place to pre vent hacking, hackers are prepared to and could successfully hack into the vendor’s system

, those hackers will discover Ma dStad’s secret designs , and they will appl y for a patent on those designs

. This level of attenuation , which depends on the illegal motivations of third parties, is too specul ative to be imminent for Arti cle III purposes. See id. at 1147. On the record before us, therefore, MadStad has failed to establish standing based on the alleged competitive disadvantage caused by the AIA relative to its compet itors. 10

d . Lost business and investment opportunities

Ma dStad also alleges standing because the AIA inhi bits it from sharing ideas with potential partners and investors, causing lost business and investment opport unities. Mr. Stadnyk declared that , because of the AIA, he already has been deterred from disclosing secret info rmation to one potential inve s tor who refused to sign a

non

- disclosure agreement. The G overnment again argues that MadStad’s subjective and unsubstantiated fear that a potential investor will illegally “scoop” its inventions is
too s peculative to create Article III standing.
We agree with the G overnment that, under Clapper

, the injury claimed by MadStad is neither fairly attribut able to the AIA no r sufficiently imminent. See Clapper

, 133 S. Ct. at 1147. While MadStad may have a su bjective belief that it ne eds a non

- disclosure agreement to di ssuade any incentive to “scoop” its IP which the AIA cr e10 Because we hold that the alleged competitive di sadvantage injury is not imminent, we do not reach Ma dStad’s argument that “competitive disadvantage is itself a form of cognizable injury.” Appellant’s Br. 2 7

.MADSTAD ENGINEERING , INC

. v. USPTO 23

ates, we again find the threat of such injury to o attenua ted to create standing here. MadStad seems to believe that the threat of a civil breach of contract suit will di ssuade a potential investor

— who is otherwise willing to commit at least two criminal actions

— from stealing its idea. See 18 U.S.C. § 1832 (2012) ( criminali z ing the theft of trade secrets ); 37 C.F.R. § 1.67 (2012) (punishing willful false statements in an inventor’s declaration by fine or imprisonment, or both). And, that it is the AIA, and only the AIA, which convinced the potential investor to resist a

non

- disclosure agreement. That is a rabbit hole which the imminency re quirement prohibits us from going down.

We find that, on this record, MadStad has failed to show actual or imminent injury for lost business and investment opportunities.

2

. The d istrict court’s reliance on Clapper was proper

MadStad also insists that the district court’s reliance

on Clapper , without considering other Supreme Court precedent, was improper. MadStad contends that the series of speculative assumptions the Government argues it must make here is far less attenuated than those in Clapper . MadS tad emphasizes that Clapper was a case where the plaintiffs themselves were not directly affected by the Act. Appellant’s Br. 39

– 40 ; Oral Argument at 5:29. While we concede that this distinction is meaningful , we, like the district court before us, find many of the general standing principles set forth in Clapper both enlightening and, ultimately , controlling. Yes, the facts in Clapper are even less condu cive to a finding of standing than those MadStad asserts here, but the facts here still do not

remove MadStad’s injuries from the realm of speculation that damned the claims in Clapper

. I n Clapper

, the Supreme Court distinguishe d several of the cases on which MadStad relies on grounds that make this case distinguishable as well. For example, the Supreme Court distinguished Monsanto because “r e-MADSTAD ENGINEERING , INC

. v. USPTO 24

spondents in the present case present no concrete ev idence to substantiate their fears, but instead rest on mere conjecture about possible governmental action.” Clapper

, 133 S. Ct. at 115 4 (citing Monsanto

, 561 U.S. at 153

– 54 )

. The farmers in Monsanto presented evidence showing that bees pollinated alfalfa and that the ir farms and the farms with genetically modified alfalfa were within the bees’ pollination range. Monsanto

, 561 U.S. at 1 53 n. 3. In this case, on the other hand, as in Clapper , MadStad provides no concrete evidence to substantiate its fears that the AIA will increase the risk of IP theft (either by hackers or untrustworthy potential investors)

. See Clapper , 133 S. Ct. at 1 153

– 54. Instead, MadStad’s fears, like the challengers in Clapper , “rest on mere conjecture about possible [hacker or potential investor ] action s .” Id

. For further example, in Friends of the Earth, Inc. v. Laidlaw Environmental Services , Inc. , 528 U.S. 167 (2000), standing was based on a company’s continuous illegal discharge of pollutants into a river. 528 U.S. at 184. The polluter in Laidlaw conceded that the pollution was ongoing. Id . In Clapper

, the Supreme Court disti nguished Laidlaw because there was no evidence that the G overnment was using the statute at issue to acquire the challenger’s communications. See Clapper , 133 S. Ct. at 1153. Similarly, in thi s case, MadStad does not allege or present evidence that anyone is actively try ing to steal its intellectual property because of the AIA.
The Supreme Court in Clapper also addressed Meese v. Keene , 481 U.S. 465 (1987)

. In Meese , the Government had taken action that th reatened to harm the plaintiff by labeling films that he wished to exhibit as “political propaganda.” 481 U.S. at 473

– 75. In Clapper , on the other hand, the G overnment had not yet taken any action that threatened the plaintiffs and the standing theory was based on speculation about potential

, fu ture Gover nment action. Clapper , 133 S. Ct. at 1153 (citing Meese

, 481 U.S. at 473

– 74). Here, as in Clapper , MadStad’sMADSTAD ENGINEERING , INC

. v. USPTO 25

alleged injury is based entirely on speculation about the potential, future activity of third parties

. S ee id

. 11

MadStad finally argue s that the trial court failed to consider an alternative test for standing under which it need only allege facts showing it has a “substantial risk” of injury

. Citing to footnote 5 in Clapper

, MadStad co ntends that the Supreme Court did not intend to disp lace this traditional test for Article III standing. 12 Because, according to MadStad, it faces a substantial risk of injury, it satisfies the Article III standing requirement even if the threat of harm is not otherwise “certainly impending.” See id. at 1150 n.5. That brings us to the Supreme Court’s most recent case addressing Article III standing, Susan B. Anthony List

. In Susan B. Anthony List , the Supreme Court held that a pro

- life advocacy organization had the right to challenge the constitutionali ty of a statute criminalizing false statements made during an election because the Elections Commission had already found probable cause

11 MadStad’s reliance on the other cases in its brief is likewise unpersuasive. See, e.g.

, Mass

. v. Envtl. Prot. Agency , 549 U.S. 497, 518

– 21 (2007) (finding standing for a state, not a private party); Duke Power Co. v. Carolina Envtl. Study Grp., Inc. , 438 U.S. 59, 73

– 74 (1978) (finding standing for individuals living near a proposed nuclear power plant due to increase in non

- natural radiation and thermal pollution).

12 The Supreme Court explained that “[o]ur cases do not uniformly require plaintif fs to demonstrate that it is literally certain that the harms they identify will come about. In some instances, we have found standing based on a ‘substantial risk’ that the harm will occur, which may prompt plaintiffs to reasonably incur costs to mit igat e or avoid that harm.” Clapper , 133 S. Ct. at 1150 n.5 (citing Monsanto , 561 U.S. at 153

– 54).MADSTAD ENGINEERING , INC

. v. USPTO 26

to believe the organization had violated the statute in the past based on behavior the Petitioner expressed a firm inte ntion to repeat and the fact that the intended beha vior would subject it to the threat of criminal prosecution and attendant penalties

. Susan B. Anthony List , 2014 WL 2675871, at *6

– 7. In finding standing, the Supreme Court reinforced previous decisions that ma d e clear that a challenger need not expose himself to arrest or prosec ution to challenge a statute as long as the threat o f arrest or prosecution is sufficiently “credible

. ” Babbitt v. Farm Workers , 442 U.S. 289, 298 (1979) ; see Holder v. Human itar ian Law Project , 561 U.S. 1 (2010) (finding standing because the challengers faced a “credible threat” of pros ecution ); Virginia v. Am. Booksellers Ass’n Inc. , 484 U.S. 383, 393 (1988) (finding standing because the challengers “alleged an actual and well -f ounded fear that the law will be enforced against them”); Steffel v. Thompson , 415 U.S. 452, 459 (1974) (finding that the challenger’s fear of arrest was not “chimerical” because his companion has already been prosecuted ). Before discussing these cases a nd the principle s from them the Court reinforced, the Court stated generally that “ [ a]n allegation of future injury may suffice if the threatened injury is ‘ certainly impending ’ or there is a

‘ substantial risk ’ that the harm will occur,” citing both Clapper’s text and its footnote 5. Susan B. Anthony List

, 2014 WL 2675871, at *5 (emphasis added) . This sentence seems to support MadStad’s argument that there is a separate “substantial risk” test that survived Cl apper and that the district court should have considered. We need not decide whether these are alternative tests for stan ding applicable to all factual circumstances, however. As the Court did in Clapper , we find both that MadStad’s alleged harms are not “certainly impending” and that MadStad has not alleged facts from which we can find that it faces a “substantial risk” of injury.MADSTAD ENGINEERING , INC

. v. USPTO 27

Unlike Susan B. Anthony List

, MadStad has not ide ntified a “history of past enforcement” to support its claim of injury, id . at *9; MadStad neither asserts that it has previously sought a patent unsuccessfully, nor that it has a firm plan to do so at any defined point in the future. And, MadStad does not assert that any act it even hopes to undertake someday would subject it to criminal pros ecution and potential criminal penalties. Most importan tly, unlike the “substantial” and “credibl[e]” threat of Elections Commission action against Susan B. Anthony List, id . at *9

– 10, MadStad’s threat of harm depends up on speculation abou t the choices which might be made by third parties. For the se reasons , we find that MadStad “falls short of even the [substantial risk] standard.” Clapper , 133 S. Ct. at 1150 n.5 (“[R]espondents fall short of even [the substantial risk] standard, in ligh t of the attenuated chain of inferences necessary to find harm here . . . . In addition, plaintiffs bear the burden of plea ding and proving concrete facts showing that the defen dant’s actual action has caused the substantial risk of harm. Plaintiffs cann ot rely on speculation about ‘the unfettered choices made by independent actors not before the court.’” (quoting Lujan , 504 U.S. at 562) (citations omitted)).

For all these reasons

, we hold that the district court did not err by relying on Clapper or concluding that MadStad lacked standing to assert the constitutional claims in its complaint.

III. C ONCLUSION For the foregoing reasons, we affirm the district court’s dismissal for lack of standing.

AFFIRMED