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

______________________ 

JONATHAN S. MASSEY, P.C., Massey & Gail LLP, of 

Washington, DC, argued for plaintiffs-appellants. 

MARK R. FREEMAN, Attorney, Appellate Staff, Civil 

Division, United States Department of Justice, of Washington, DC, argued for defendants-appellees. With him on 

the brief were STUART F. DELERY, Assistant Attorney 

General, A. LEE BENTLEY, III, Acting United States Attor-
2 MADSTAD ENGINEERING, INC. v. USPTO

ney, and SCOTT R. MCINTOSH, Attorney. Of counsel on the 

brief were NATHAN K. KELLEY, Deputy General Counsel 

for Intellectual Property Law and Solicitor, SCOTT C.

WEIDENFELLER and AMY J. NELSON, Associate Solicitors, 

United States Patent and Trademark Office, of Alexandria, Virginia.

______________________ 

Before NEWMAN, O’MALLEY, and WALLACH, Circuit 

Judges.

O’MALLEY, 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 (collectively, “the Government”) 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” provision of the 

Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 

112-29, § 3, 125 Stat. 284, 285–294 (2011) is unconstitutional and a permanent injunction barring enforcement of 

the AIA. 

The district court granted the Government’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 

unconstitutional. 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. BACKGROUND

On September 16, 2011, the President signed into law

the AIA. The AIA, inter alia, adopted the “first-inventorto-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 derived 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 challenged provision was 

not severable from the remainder of the Act. The complaint sought a declaration that the entirety of the AIA is 

unconstitutional and a permanent injunction barring its 

enforcement. 

The parties agreed that no material issues of fact

were in debate and that MadStad’s claim could be resolved as a matter of law. Mr. Stadnyk is a resident of 

Florida and the named inventor on 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 invention, the second inventor would get priority); Gayler v. 

Wilder, 51 U.S. 477, 496–98 (1850) (same). But it remained the governing principle nonetheless.

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

 
4 MADSTAD ENGINEERING, INC. v. USPTO

claimed standing to pursue his challenge to the AIA. 

After considering the parties’ submissions, the district 

court dismissed 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 holding that the plaintiffs lack standing to 

challenge the constitutionality of the AIA. Thus, MadStad argues 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. DISCUSSION

We first discuss whether we are authorized to decide 

this case under Article III.

A. Jurisdiction

Neither party disputes this court’s jurisdiction over 

this appeal under 28 U.S.C. § 1295(a)(1) (2012). As a 

court of limited jurisdiction, however, we still must address this issue. See Bender v. Williamsport 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 Congress pursuant thereto . . . . 

For that reason, every federal appellate court has a 

special obligation to satisfy itself . . . of its own jurisdiction.” (citation omitted)). Indeed, MadStad itself was 

sufficiently unsure of whether this court possesses jurisdiction over this matter that it filed a protective appeal in 

the United States Court of Appeals for the Eleventh 

Circuit soon 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 arising 
MADSTAD 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 relating 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 claim). Thus, the Court has 

on a number of occasions assessed whether a claim arises 

only under state law or, alternatively, involves a sufficiently substantial federal issue to justify federal jurisdiction or—where patent-related issues are involved—even 

preempt state court jurisdiction over a matter. See, e.g., 

Gunn v. Minton, __ U.S. __, 133 S. Ct. 1059, 1068 (2013) 

(holding that malpractice claims, based on an attorney’s 

handling of a patent case, are not subject to exclusive 

jurisdiction of federal courts). 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 question 

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 331–32. These changes, however, do not affect our jurisdiction over this appeal.

 
6 MADSTAD ENGINEERING, INC. v. USPTO

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 arising 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 implementing regulations” were unconstitutional under the 

Fifth and 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 without analysis of the jurisdictional question, however.4

Upon consideration, we conclude that jurisdiction over 

this 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. See Gunn, 133 

S. Ct. at 1064. While the Supreme Court has not ad4 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 jurisdiction 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 Constitution can also be said to arise under 

a federal statute for jurisdictional purposes, we believe 

the Supreme Court’s jurisprudence 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 disputed, (3) substantial, and (4) capable of resolution in federal 

court without disrupting the federal-state balance approved by Congress.” Id. at 1065. While not perfectly 

translatable to the question before us, these guideposts 

are helpful. First, a resolution 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 Property 

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 firstinventor-to-file provision of the AIA. 

Second, a review of the parties’ briefs, both on the 

merits and with respect 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 since it is the fact that the claim originates in 

something that gives rise to federal subject matter jurisdiction—the Constitution, laws, or treaties of the United 

States—that resolves any jurisdictional doubts. Even in 

the patent arena, it is only at the Appellate level that this 

unusual jurisdictional issue arises.

 
8 MADSTAD ENGINEERING, INC. v. USPTO

certainly substantial 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-file 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 precisely 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 to 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 government action as the “classic example” of a claim which, 

though having its origin in state law, arises 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 question the constitutional validity of an Act of Congress).

Finally, to the extent Congress has attempted to “balance” 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 jurisdiction 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 federal 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 Patlex, that MadStad’s claims and this appeal “arise under”

an Act of Congress relating to patents within the meaning 
MADSTAD 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

Although we have statutory jurisdiction over its appeal, 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 the challenged action”; and (3) “redressable by a favorable ruling.” Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149 (2010). The party 

invoking federal jurisdiction has the burden of establishing each of these elements. Lujan v. Defenders of Wildlife, 

504 U.S. 555, 561 (1992). Standing is a jurisdictional 

question whose resolution we review de novo. Id. at 560–

561. 

The Supreme Court recently addressed when a party 

has standing to challenge, pre-enforcement, the constitutionality 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, “attor6 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 continue 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.

 
10 MADSTAD ENGINEERING, INC. v. USPTO

neys and human rights, labor, legal, and media organizations 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 Intelligence Surveillance Act (“FISA”). 133 S. Ct. at 1145. 

Congress 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. See 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. According to Amnesty, the threat of surveillance under this 

amendment will force them to travel abroad to have inperson conversations and undertake other costly 

measures to protect the confidentiality of sensitive communications. Clapper, 133 S. Ct. at 1145–46.

The Supreme Court held that Amnesty did not have 

standing to assert a constitutional 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 Government will choose to invoke 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] to 
MADSTAD ENGINEERING, INC. v. USPTO 11

the particular communications that the Government intercepts.

Id. at 1148. Because it found each 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 reluctance to endorse standing theories that rest on speculation about the decisions of independent actors.” Id. at 

1150.

MadStad asserted standing below, arguing that it 

“has numerous inventions at different stages of development” and the AIA: (1) forces MadStad to enhance computer 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 competitive disadvantage with larger companies; 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 considered its first alleged injury 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 demonstrate causation and 

standing.”).

 
12 MADSTAD ENGINEERING, INC. v. USPTO

The 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 hypothetical consequences of legislation, that is, in each 

case the plaintiffs expended funds in response to 

an entirely subjective and self-actuated trepidation about conjectural events. In each case, actualization of the conjectural events depends upon 

the contingent action of a third party . . . . In each 

case, the expenditures in anticipation of these conjectural events are controlled entirely by the 

judgment and discretion of the plaintiffs . . . .

MadStad, 2013 WL 3155280, at *6. In other words, the 

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, the district court determined that MadStad failed to prove that any injury was actual or imminent under Clapper and 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 asserted 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 MadStad’s alleged injuries in turn 

to determine whether they are sufficient to support the 

minimum requirements for Article III standing, individually or collectively.
MADSTAD ENGINEERING, INC. v. USPTO 13

a. Increased risk of computer hacking

MadStad alleges 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 argues 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 farfetched because it assumes too much. Specifically, the 

trial court found that, to conclude that MadStad’s need to 

undertake additional security measures is traceable to the 

AIA, it would have to assume that, (1) although knowing 

of hacking threats to its intellectual property generally, 

MadStad would not have acquired, installed, and operated the available state-of-the-art security, regardless of the 

AIA, (2) thieves will successfully hack MadStad’s computers 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 

able 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 incorrectly assumed that it would not purchase additional 

security equipment because of the AIA. MadStad contends that it has already suffered injury attributable to 

the AIA because it did purchase and implement enhanced 

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. 
14 MADSTAD ENGINEERING, INC. v. USPTO

MadStad’s arguments miss the mark. In order to establish 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 enacted. 

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 Argument 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 (“[MadStad] does have some [computer] 

security.”). Even accepting the proposition that MadStad 

did choose to install heightened security in response to 

the AIA, we 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. The alleged increased threat is, thus, 

solely based on speculation about the capabilities and 

incentives of illegal hackers. 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 court concluded, MadStad’s standing claim is “dilut-
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 persistence 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, even assuming that the AIA “creates an unparalleled reward system for corporate espionage and hacking,” 

Appellant’s Br. 33, the belief that there will be an increase 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 standing theories that rest on speculation about the 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 firstinventor-to-file system—is predicated solely upon the 

unsupported assumption that hackers, in response to the 

AIA, will increase efforts to illegally steal IP by launching 

more cyber-attacks for the precise purpose of prosecuting 

a patent thereon. Again, because this alleged injury is 

dependent upon the hypothetical, illegal 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 1148 (“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, even assuming that the AIA leads to an increase of cyber-attacks, that those attacks are successful, 
16 MADSTAD ENGINEERING, INC. v. USPTO

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 patented, 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, inexpensive 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 somewhat elastic concept, it cannot be stretched beyond its 

purpose, which is to ensure that the alleged injury is not 

too speculative for Article III purposes—that the injury is 

certainly impending.” (quoting Lujan, 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 because 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 companies 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 because of the AIA. MadStad argues that Mr. 

Stadnyk is an inventor who has patented inventions in 

the past and that he intends 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 patents 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 applications (i.e., after the March 16, 2013 effective date of the 

first-inventor-to-file provision) 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 rejection 

based on an earlier filed application on that same invention and lose a derivation proceeding he initiates to challenge that earlier filing. See Oral Argument at 22:05, 

24:35.8

8 In its lower court brief, the Government specifically argued that, to establish standing, MadStad:

would have to establish that all of the following 

contingencies will occur: (1) Plaintiffs’ invention 

becomes “patentable” (2) only after the firstinventor-to-file provision take[s] effect in midMarch 2013; (3) Plaintiffs decide to seek a patent 

on that invention; (4) another party independently 

 
18 MADSTAD ENGINEERING, INC. v. USPTO

MadStad says that the government requires too much. 

MadStad points to a written declaration by Mr. Stadnyk 

where he explains: 

The Government has raised a question as to 

whether my new (currently non-patented) inventions will ultimately meet the necessary preconditions for obtaining a patent. I am operating on 

the assumption that they will meet the requirements of patentability. I believe that some of my 

inventions are in fact close to patentability. I am 

continuing to research, develop, and test my inventions in preparation for filing patent applications. 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 increased costs and burdens from having to operate 

in a First-[Inventor-]to-File environment.

J.A. 62–63 (emphases added). MadStad explains that “in 

the real world, small inventors face countervailing 

needs—to develop their inventions further, attract investment, and persuade business partners that the invention is viable.” Appellant’s Reply 6. MadStad argues 

that, under the first-to-invent system, small inventors are 

forced to file applications containing inadequate descriptions 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 earlier 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 

shown 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 prerequisite 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. Stadnyk 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 testing 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, moreover, give no specific time 

frame in which he expects to file another patent application, other than to abstractly say he “believe[s] that some 

of [his] inventions are in fact close to patentability.” J.A. 

62–63. Though Mr. Stadnyk has filed for patent applications 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; see Lujan, 504 U.S. at 564–65 (holding that 

professions of “‘some day’ intentions—without any de-
20 MADSTAD ENGINEERING, INC. v. USPTO

scription of concrete plans or indeed even any specification of when the some day will be—do not support a 

finding of the ‘actual or imminent’ injury 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, MadStad 

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 disadvantage relative to competitors

MadStad also asserts that the AIA puts it at “competitive 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. 

MadStad contends that the AIA forces small entities 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 inhouse development and testing centers, which larger 

competitors already have in place. In support of this 

claimed injury, MadStad points to testimony from investors and to statements of members of Congress 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 application, and to avoid the later claim of concealment or suppression. The Government also points to the AIA’s 

creation of “derivation proceedings” to allow an inventor 
MADSTAD ENGINEERING, INC. v. USPTO 21

to demonstrate that an invention disclosed was improperly 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 reasons its argument that it is 

injured by having to file additional applications fails. 

MadStad has not asserted that it has, in fact, set up inhouse research facilities which it did not have in place 

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 concerns too speculative and generalized to meet the “concrete, particularized, and actual 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 disadvantage relative to larger companies because it must 

divert resources to create in-house development and 

testing centers fails for additional reasons as well. Like

MadStad’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, moreover, that MadStad has alleged that 

it will be at a competitive disadvantage relative to larger 

competitors without 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. 

 
22 MADSTAD ENGINEERING, INC. v. USPTO

least, that MadStad’s outside vendors do not have adequate security measures in place to prevent hacking, 

hackers are prepared to and could successfully hack into

the vendor’s system, those hackers will discover MadStad’s secret designs, and they will apply for a patent on 

those designs. This level of attenuation, which depends 

on the illegal motivations of third parties, is too speculative to be imminent for Article 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 competitors.10

d. Lost business and investment opportunities

MadStad also alleges standing because the AIA inhibits it from sharing ideas with potential partners and 

investors, causing lost business and investment opportunities. Mr. Stadnyk declared that, because of the AIA, he

already has been deterred from disclosing secret information to one potential investor who refused to sign a 

non-disclosure agreement. The Government again argues 

that MadStad’s subjective and unsubstantiated fear that 

a potential investor will illegally “scoop” its inventions is 

too speculative to create Article III standing. 

We agree with the Government that, under Clapper, 

the injury claimed by MadStad is neither fairly attributable to the AIA nor sufficiently imminent. See Clapper, 

133 S. Ct. at 1147. While MadStad may have a subjective 

belief that it needs a non-disclosure agreement to dissuade any incentive to “scoop” its IP which the AIA cre10 Because we hold that the alleged competitive disadvantage injury is not imminent, we do not reach MadStad’s argument that “competitive disadvantage is itself a 

form of cognizable injury.” Appellant’s Br. 27. 

 
MADSTAD ENGINEERING, INC. v. USPTO 23

ates, we again find the threat of such injury too attenuated to create standing here. MadStad seems to believe 

that the threat of a civil breach of contract suit will dissuade 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) (criminalizing 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 requirement 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 district 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. MadStad 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 conducive 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. 

In Clapper, the Supreme Court distinguished 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 “re-
24 MADSTAD ENGINEERING, INC. v. USPTO

spondents in the present case present no concrete evidence to substantiate their fears, but instead rest on mere 

conjecture about possible governmental action.” Clapper, 

133 S. Ct. at 1154 (citing Monsanto, 561 U.S. at 153–54). 

The farmers in Monsanto presented evidence showing 

that bees pollinated alfalfa and that their farms and the 

farms with genetically modified alfalfa were within the 

bees’ pollination range. Monsanto, 561 U.S. at 153 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 1153–54. Instead, MadStad’s fears, like 

the challengers in Clapper, “rest on mere conjecture about 

possible [hacker or potential investor] actions.” 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 distinguished Laidlaw because there was no evidence that the 

Government was using the statute at issue to acquire the 

challenger’s communications. See Clapper, 133 S. Ct. at 

1153. Similarly, in this case, MadStad does not allege or 

present evidence that anyone is actively trying 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 threatened 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 Government had not yet taken any action 

that threatened the plaintiffs and the standing theory 

was based on speculation about potential, future Government action. Clapper, 133 S. Ct. at 1153 (citing Meese, 

481 U.S. at 473–74). Here, as in Clapper, MadStad’s 
MADSTAD ENGINEERING, INC. v. USPTO 25

alleged injury is based entirely on speculation about the 

potential, future activity of third parties. See id.11 

MadStad finally argues 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 contends that the Supreme Court did not intend to displace 

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 constitutionality 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 plaintiffs 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 mitigate or avoid that harm.” Clapper, 133 S. Ct. at 1150 n.5 

(citing Monsanto, 561 U.S. at 153–54).

 
26 MADSTAD ENGINEERING, INC. v. USPTO

to believe the organization had violated the statute in the 

past based on behavior the Petitioner expressed a firm 

intention to repeat and the fact that the intended behavior 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 made clear that a 

challenger need not expose himself to arrest or prosecution to challenge a statute as long as the threat of arrest 

or prosecution is sufficiently “credible.” Babbitt v. Farm 

Workers, 442 U.S. 289, 298 (1979); see Holder v. Humanitarian Law Project, 561 U.S. 1 (2010) (finding standing 

because the challengers faced a “credible threat” of prosecution); Virginia v. Am. Booksellers Ass’n Inc., 484 U.S. 

383, 393 (1988) (finding standing because the challengers 

“alleged an actual and well-founded 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 and the principles 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 Clapper and 

that the district court should have considered. We need 

not decide whether these are alternative tests for standing 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 identified 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 prosecution and potential criminal penalties. Most importantly, 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 upon 

speculation about the choices which might be made by 

third parties. For these 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 light of the 

attenuated chain of inferences necessary to find harm 

here . . . . In addition, plaintiffs bear the burden of pleading and proving concrete facts showing that the defendant’s actual action has caused the substantial risk of 

harm. Plaintiffs cannot 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. CONCLUSION

For the foregoing reasons, we affirm the district 

court’s dismissal for lack of standing.

AFFIRMED