Ruling that it had jurisdiction to consider a constitutional challenge to the America Invents Act (AIA), the Federal Circuit Court of Appeals has dismissed the challenge, finding that the plaintiff lacked standing to assert the claims. MadStad Eng’g, Inc. v. USPTO, Nos. 2013-1511, -1512 (Fed. Cir. July 1, 2014). Additional details about the case appear in Issues 41 and 42 of this Bulletin.
As to its jurisdiction, the Federal Circuit determined that resolution of the constitutional challenge “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 derivative actions encompassed within the first-inventor-to-file provision of the AIA.” These matters, according to the court, are also at the “heart of the parties’ dispute” and are “substantial to the current state of patent law,” requiring “continued uniform application.”
The court agreed with the district court that the company and its owner, a “garage inventor” who holds a patent on a motorcycle windshield, lack standing because “in order for MadStad to actually suffer any injury fairly traceable to the AIA, an ‘acutely attenuated concatenation of events’ was required.” The company’s alleged harms—increased risk of computer hacking, increased time and effort to file additional patent applications, competitive disadvantage relative to competitors, and lost business and investment opportunities—depended on the company’s subjective beliefs and the speculative actions of third parties as well as a series of assumptions about what could to come to pass.
While the court rejected every argument the plaintiffs advanced, it refused to adopt the government’s standard that, 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.” Still, the court found that, on the record, “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.”