Indefiniteness and Means-Plus-Function: Fintiv v. PayPal
Bo Xiao | May 7, 2025
Case Name: FINTIV, INC., v. PAYPAL HOLDINGS, INC.
Decided: : April 30, 2025
Before: PROST, TARANTO, and STARK, Circuit Judges.
Summary
The Federal Circuit affirmed the Western District of Texas’s ruling that invalidated Fintiv, Inc.’s asserted claims against PayPal Holdings, Inc. on the basis of indefiniteness under 35 U.S.C. § 112 ¶ 6. The court held that Fintiv’s “payment handler” claim terms lacked sufficient structural disclosure and were therefore indefinite.
Background
Fintiv sued PayPal for patent infringement, asserting U.S. Patent Nos. 9,892,386; 11,120,413; 9,208,488; and 10,438,196. These patents relate to cloud-based transaction systems, described variously as “mobile wallet platforms” or “electronic payment systems.” The claims at issue recited a “payment handler” or “payment handler service” configured to use APIs of various payment processors or to expose a common API for interacting with them.
The ’386 and ’413 patents share a common specification, as do the ’488 and ’196 patents. The specifications of all four asserted patents are substantially similar. The key terms at issue in the case are the “payment handler” terms. These terms appear in the asserted claims as follows:
- ’386 patent, claims 1–3:
“a payment handler service operable to use [application programming interfaces (“APIs”)] of different payment processors including one or more APIs of banks, credit and debit cards processors, bill payment processors.” - ’413 patent, claim 1 (and similarly in claim 2):
“a payment handler configured to use APIs of different payment processors including one or more APIs of banks, credit and debit cards processors, and bill payment processors.” - ’488 patent, claim 1, and ’196 patent, claim 1:
“a payment handler that exposes a common API for interacting with different payment processors.”
After claim construction, the district court concluded that the “payment handler” terms were means-plus-function terms invoking § 112 ¶ 6 (pre-AIA, now § 112(f) in the AIA), and that the patents failed to disclose sufficient corresponding structures. All four patents are based on two provisional applications filed in 2011, and therefore fall under pre-AIA. The court held the claims indefinite and entered final judgment. Fintiv appealed.
Discussion
The central issue was whether the “payment handler” terms invoked § 112 ¶ 6. Although the claims did not use the word “means,” the district court held that the terms described functions without reciting sufficient structure. It found that words like “handler” and “service” were merely generic labels akin to the term “module.” The court emphasized that the surrounding claim language, including terms like “operable to” and “configured to,” described functions without imparting structure.
Fintiv argued that the term “payment handler” would be recognized by a person of ordinary skill in the art (POSA) as referring to a known type of structure, citing examples such as the Internet Open Trading Protocol (IOTP). Although Fintiv presented this as evidence of structural meaning, the court agreed with the district court and found that the term “handler” alone, and the “payment handler” terms as a whole, do not provide any structure for performing the claimed functions.
Fintiv also argued that the claim language defines the inputs, outputs, and operation of the payment handler. However, the court found that the claims and the specification, including the figures, do not provide sufficiently definite structure for the inputs, outputs, connections, or operation of the payment handler. Instead, the specification merely repeats the claim language without offering additional technical detail.
After determining that the payment handler terms were subject to § 112 ¶ 6, the court examined whether the patents disclosed corresponding structure for performing the claimed functions. Both the district court and the Federal Circuit found that the patents repeated the functional claim language without explaining how the functions were actually implemented.
Fintiv contended that the patents described a two-step algorithm: wrapping APIs and exposing a common API. The court rejected this, concluding that these so-called steps were nothing more than functional restatements and lacked the specificity required to inform a POSA how to perform the claimed functions. Without a disclosed algorithm or identifiable structure, the claims were held indefinite.
Technical Commentary
This case sets a high bar for software related patent applications, which would impose stringent requirements for disclosing functional models that serve specific design roles within a system. The court found the “payment handler” terms indefinite due to a lack of structural disclosure; however, this conclusion might be open to technical debate from a computer science perspective.
“Payment handler” alone may appear generic, but when tied to APIs as described in the claims, it might not be merely generic. Instead, it may reflect a specific design pattern commonly used in software architecture for implementing a handler component. In computer science, the use of APIs to abstract and manage interactions with multiple external systems is a well-known and standardized design pattern. The concept of “wrapping” APIs to unify interfaces across various systems has been widely practiced since at least the early 2000s. An API focuses on how code is organized and modularized, not on how internal tasks are executed algorithmically.
Courts have emphasized that when a general purpose processor performs a claimed function, the patent must disclose the underlying algorithm. However, in many software systems, APIs are part of a broader architectural design. When the API’s behavior is well-understood or supported by flowcharts or system diagrams showing data flows, this combination can be sufficient to convey structure for the system.
In this case, the court found the specification and figures insufficient to support the “payment handler” terms. However, the ’413 patent includes 23 interaction diagrams (Figs. 20A–22J), all illustrating interactions involving the payment handler. These figures provide multiple examples showing how the payment handler receives inputs and passes outputs. When read in context, the diagrams function as a software design guide that outlines system behavior and integration of modular components.
The claims are directed to a system, and within that system, the API is a defined component that plays its role in structuring and enabling its functionality. In this context, the API itself serves as a structural component of the overall system.
Expecting the specification to disclose an algorithm for such a structural component may not reflect how software systems are typically designed or understood by those skilled in the art. If a detailed claim analysis were to show that the system can perform its essential inventive function without requiring an algorithmic disclosure for the API, it would be arguable whether the term “payment handler” should be deemed indefinite.
Takeaways
- If a software claim recites only functional terms without disclosing how the function is performed, it may be at risk of being found indefinite for lack of supporting structure.
CAFC Affirms Prosecution Disclaimer and Non-Infringement in ANDA Case
Fumika Ogawa | April 23, 2025
Case Name: AZURITY PHARMACEUTICALS, INC. v. ALKEM LABORATORIES LTD.
Decided: April 8, 2025
Before: MOORE, Chief Judge, CHEN, Circuit Judge, and MURPHY, District Judge. Opinion by Murphy.
Summary
The CAFC affirmed prosecution disclaimer and non-infringement in ANDA litigation, where the patentee’s sweeping disclaimer in the patent’s parent application applies to the continuation patent claims, despite the patentee’s belated efforts to take back disclaimer statements in a later, related application and to revise the scope of disclaimer to exclude the ANDA product.
Details
Azurity sued Alkem in the district court for an ANDA-induced infringement of certain claims of Azurity’s U.S. Patent No. 10,959,948 (“the ’948 patent”), directed to liquid vancomycin formulations for oral administration. The asserted claims use a close-ended “consisting of” transition and do not list propylene glycol, whereas Alkem’s ANDA product contains propylene glycol both as a co-solvent and as a component of the grape flavoring agent.
The district court found non-infringement where Alkem’s ANDA product contained propylene glycol, and Azurity, through prosecution history, had disclaimed any presence of propylene glycol from the patented formulations, with the disclaimer not overcome by certain language in the parties’ pretrial stipulation. At issue in the appeal are: (1) whether there was a clear and unmistakable disclaimer, (2) whether the stipulation precluded such disclaimer, and (3) whether the district court erred in finding no infringement. The CAFC addressed the issues in turn.
- Prosecution disclaimer
The CAFC went through prosecution history of Azurity’s relevant patent family.
The ’948 patent issued from application No. 16/941,400 (“the ’400 application”), which is a continuation of application No. 15/126,059 (“the ’059 application”). The ’059 application had been repeatedly rejected over a prior art reference Palepu which disclosed “a polar solvent including propylene glycol.” Throughout the prosecution, Azurity had made repeated attempts, through amendments and remarks, to distinguish over Palepu based on the absence of propylene glycol in the claimed invention.
Specifically, Azurity initially sought distinction using a negative limitation in some claims such as “wherein the oral liquid solution does not comprise a propylene glycol,” or introducing the close-ended “consisting of” language in other claims, such as “[a] liquid solution comprising a carrier consisting of” certain ingredients excepting propylene glycol. Both approaches failed as the Examiner found the negative limitation as lacking written description and the “consisting of” limitation with the preceding “comprising” transition as being indefinite. The §112 issues eventually forced Azurity to adopt the close-ended transition “consisting of” excluding unrecited propylene glycol from the claimed formulation, an amendment which led to allowance of the ’059 application. The claim amendments were accompanied by applicant’s repeated arguments, including a Rule 132 declaration by Azurity’s officer, emphasizing the claims’ lack of propylene glycol as a key distinction over Palelu. The Examiner expressly allowed the claims based on this exclusion.
The “consisting of” transition omitting propylene glycol was inherited by the ’400 application, which was allowed without rejection and resulted in the ’948 patent claims. For example, representative claim 5 recites a liquid formulation “consisting of: a buffering agent [selected from a recited group of buffering agents], water, a sweetener, a preservative [selected from a recited group of preservatives], vancomycin hydrochloride, and flavoring agent” (emphasis added), along with certain properties of the formulation.
Aside from the ’059 application, Azurity’s patent family includes No. 16/892,421 (“the ’421 application”)—the ’400 application’s grand-nephew claiming priority from the ’059 application. In the ’421 application, Azurity—after Alkem’s submission of Paragraph IV notice letter—apparently attempted to retract the disclaimer by stating: “For the record, Applicant did not disclaim propylene glycol when submitting the arguments in [the ’059 application], and reserves the right to claim propylene glycol in the instant and future cases in this patent family.”
Based upon the prosecution history, the CAFC found that Azurity clearly and unmistakably disclaimed any presence of propylene glycol from the ’948 patent. The CAFC was unpersuaded by Azurity’s non-disclaimer arguments including: (a) its “for the record” remarks made in the ’421 application are also relevant to the disclaimer analysis; and (b) the disclaimer of propylene glycol applies only to “the carrier” and not to “the flavoring agent.”
As for the “for the record” argument, the CAFC distinguished over the precedents where statements in the prosecution histories of patents from a common ancestor application may be relevant for claim interpretation in the related, later-issued patents. Here, the ’421 application and the ’400 application were prosecuted in parallel; there is no direct lineage from the ’421 application to the ’400 application; and the remarks at issue post-dated allowance of the asserted patent. To be consistent with the public notice function of the prosecution history, Azurity is barred from recanting its earlier disclaimer by the later, unilateral statement in the related application.
As for the “carrier” distinction, the CAFC pointed to the ’059 prosecution history where Azurity abandoned the “solution comprising a carrier consisting of” limitation in favor of the “consisting of” transition. While the CAFC acknowledged Azurity’s current argument that Palepu disclosed propylene glycol “only as a carrier” as opposed to a flavoring agent, such a distinction was never made during prosecution. “Just as the echo matches the shout,” the CAFC noted that the disclaimer scope is defined by the arguments as made, not as later refined.
- Pretrial stipulation
Azurity contended that a joint pretrial stipulation—stating that “suitable flavoring agents for use in the Asserted Claims include flavoring agents with or without propylene glycol”—precluded the application of the disclaimer. To Azurity, the stipulation would define the scope of “infringing flavoring agents” so that Alkem—with its product containing propylene glycol as part of the flavoring agent—could not rely on the disclaimer of propylene glycol, whereas Alkem argued that the stipulation was to simply clarify the general scope of the relevant flavoring agents in the field.
The CAFC sided with Alkem for several reasons. First, Azurity’s interpretation conflicted with another part of the stipulation stating that “Alkem does not dispute infringement except that it ‘contends that it does not infringe the Asserted Claims due to [the] presence of propylene glycol in Alkem’s ANDA Products.” Second, the disputed stipulation is set forth in a manner different from the rest of the undisputed facts each of which refers to meeting a limitation of any claim. Third, the disputed stipulation originated from Azurity’s concession over claim construction, admitting “that the plain and ordinary meaning of the claim term ‘flavoring agent’ includes flavoring agents without propylene glycol.” Based on the circumstances, the CAFC concluded that the stipulation does not preclude the disclaimer.
- The district court’s finding of non-infringement
After affirming the prosecution disclaimer and the pretrial stipulation, the CAFC found no error in the district court’s finding of non-infringement. The CAFC indicated that the existence of the prosecution history was a decisive factor. Absent the comprehensive disclaimer of any propylene glycol—either as an individual ingredient or as a concomitant of flavoring agent—Azurity may have had a colorable argument that propylene glycol would affect the flavoring of the product, and that propylene glycol and grape flavoring—both included in Alkem’s ANDA product—collectively are a flavoring agent, so as to read on the claimed “flavoring agent” while concurrently meeting the exclusion of “propylene glycol.” But the disclaimer precluded such a position.
Takeaways
This case underscores the lasting impact of prosecution history on claim scope, from an ancestor application to its descendent patent. Applicant cannot walk back a disclaimer in later, related applications—particularly those not in direct lineage. Also, in distinguishing prior art, care must be taken to avoid a broad, sweeping argument which could unknowingly over-restrict the claim scope to assert infringement.
Written Description is Required When a Preamble is Limiting
Stephen G. Adrian | March 26, 2025
IN RE: XENCOR, INC
Date of decision: March 13, 2025
Panel: before Hughes, Stark and Schroeder (District Judge (Eastern District of Texas) sitting by designation), Opinion by Schroeder
Background
This precedential decision is from an appeal by Xencor from a decision by the Appeals Review Panel (ARP). The ARP was established July 24, 2023. The ARP may be convened by the Director sua sponte to review decisions of the Patent Trial and Appeal Board (PTAB or Board) in ex parte appeals, re-examination appeals, and reissue appeals.
The application at issue is 16/803,690, which is a continuation application having an earliest priority date of February 25, 2008. Claim 8 (a Jepson claim) and claim 9 are at issue:
8. In a method of treating a patient by administering an anti-C5 antibody with an Fc domain, the improvement comprising
said Fc domain comprising amino acid substitutions M428L/N434S as compared to a human Fc polypeptide,
wherein numbering is according to the EU index of Kabat,
wherein said anti-C5 antibody with said amino acid substitutions has increased in vivo half-life as compared to said antibody without said substitutions.
9. A method of treating a patient by administering an anti-C5 antibody comprising:
a) means for binding human C5 protein; and
b) an Fc domain comprising amino acid substitutions M428L/N434S as compared to a human Fc polypeptide,
wherein numbering is according to the EU index of Kabat, wherein said anti-C5 antibody with said amino acid substitutions has increased in vivo half-life as compared to said antibody without said substitutions.
The Examiner had rejected the claims as lacking written description. Xencor appealed to the Patent Trial and Appeal Board. The Board held that the preambles of the claims are limiting, and that Xencor had not shown that the application contained a sufficient written description for either claim. The Board decision also determined that Xencor had not shown that anti-C5 antibodies or methods of treating patients with anti-C5 antibodies were well-known in the art at the time of invention.
Xencor petitioned for reconsideration, and the Board again found against Xencor for the same reasons. Xencor appealed to the CAFC. Prior to being heard, the Patent Office requested remand to the ARP (presumably to address the preamble).
The decision of the ARP addressed whether written description was required for Jepson claim preambles. It found that Jepson preambles define the scope of the claim, and therefore a written description is required. The ARP found the preamble language “treating a patient” as limiting because it was necessary to give life, meaning, and vitality to both limitations “increased in vivo half-life” and “administering” (the sole method step).
The ARP decision then concluded the claims did not have sufficient written description. The specification did not provide a representative number of species to support the broad genus of anti C5 antibodies being claimed. The specification only disclosed one anti-C5 antibody (5G1.1). The ARP also adopted the Board’s findings that Xencor’s expert was not credible and that Xencor had not demonstrated that anti-C antibodies were well-known (in which case not requiring further support in the specification).
The ARP decision also found that “treating a patient” was not supported by an adequate written description since the specification does not describe what patients with what diseases or conditions can be successfully treated with an anti-C antibody.
Xencor appealed the decision of the ARP to the CAFC.
Discussion
The Director stated that the CAFC’s standard of review of ARP’s decisions is the same as for decisions from the Board. As such, legal determinations are reviewed de novo, while factual findings are reviewed for substantial evidence.
Xencor argues that the preamble “treating a patient” is not limiting, that the preamble of a Jepson claim does not require written description, and, in the alternative, written description was satisfied for the preambles of both claims.
Claim 9
With respect to a “method of treating a patient by administering an anti-C5 antibody”, Xencor argues the different sections of the preamble should be treated independently, that is “treating a patient” and “administering an anti-C5 antibody”, where the “treating a patient” is not limiting. As such, Xencor argues that only “administering an anti-C5 antibody” should be considered limiting.
The CAFC agreed with the Director that “treating a patient by” is limiting. The CAFC first noted that Xencor does not dispute that “administering an anti-C5 antibody” should be considered limiting. The CAFC noted that the phrases are connected by the term “by” which gives credence to the argument that the entire preamble should be considered limiting. The “treating a patient” is done by administering the anti-C5 antibody, which is not a mere statement of purpose or a statement of intended result. In addition, since the claim does not require a dosage and rate, a person of ordinary skill in the art would have read the claim language of “increased in vivo half-life” in conjunction with “treating a patient” in order to make sense. Still further, the preamble provides a “raison d’etre” (reason for being) for the claim. An increased in vivo half-life only makes sense with respect to a living being (otherwise it cannot be in vivo) and has a specific utility with respect to treatment. Lastly, the specification teaches longer in vivo half-lives allow more seldom injections such that the specification “gives further color to the language of the claims and the understanding we have of the language as limiting.”
The CAFC then considered whether the specification satisfied the written description requirement. No specific amount of efficacy is claimed, so no specific amount is required in the specification. The application does not define the meaning of “treating” and does not provide any data associated with treating any patient with any disease or condition with any anti-C5 antibody. As such, the specification does not limit the treatment to any specific disease. As such, “treating a patient” means “treating all patients and all diseases”. At best, the disclosure of three classes of diseases/conditions that might benefit from administration of various antibodies with an Fc modification and lists various unmodified antibodies that could be modified and used to that end. Such disclosure is found to be “inadequate to demonstrate possession of a method of treating any particular disease/condition with the claimed anti-C5 antibodies, let alone all diseases/conditions within the three enumerated classes.”
Xencor had argued that the claim does not require the treatment to be effective. However, the ARP merely required that the applicant had possession of a method of treating a patient with 5G1.1 and its equivalents and found that it did not.
Claim 8
Claim 8 raises the question of whether a Jepson claim requires written description since the preamble of a Jepson claim defines what the prior art is, followed by recitation of what the improvement is. Xencor argues that a written description is only needed for the improvement.
Under 35 U.S.C. 112, a specification must contain a written description of the invention. This requirement must “be met in some way so as to describe the claimed invention so that one skilled in the art can recognize what is claimed.”
Such a description is context-specific: “[T]he level of detail required to satisfy the written description requirement varies depending on the nature and scope of the claims and on the complexity and predictability of the relevant technology.” Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010); see also Univ. of Rochester, 358 F.3d at 923 (explaining that merely stating “automobile” in a claim would not have been sufficient written description at the time of invention of the automobile).
In a Jepson claim, the preamble is used to define the invention, thereby limiting the claim scope. The invention is not only the improvement but also the improvement as applied to the prior art. Simply asserting that something is well known in the art is not sufficient to show that the inventor had possession of the claimed invention. The CAFC gave an example:
For example, a patentee cannot obtain a Jepson claim with a preamble that says that a time machine is well-known in the art without describing a time machine, in sufficient detail to make clear to a person of ordinary skill in the art that the inventor is in possession of such a time machine. Adoption of Xencor’s position would leave the patent system vulnerable to such abuse.
Thus, an adequate written description for a Jepson claim requires the applicant to establish what is claimed to be well-known in the art is, in fact, well known in the art.
Takeaway
Claims need to be supported by a written description as required by 35 U.S.C. 112, including the preamble when the preamble is considered limiting.
Do not include language in a preamble of a Jepson claim if it is not well-known or not supported by the specification. For this application, perhaps simply stating a method of administering an anti-C5 antibody could have avoided the written description problem, but perhaps this could lead to other issues such as enablement.
At the time the specification was filed in 2008, the specification stated “the exact dose will depend on the purpose of treatment” and the characteristics of the patient. This likely raises questions whether the inventor was in possession of the claimed invention (treating all patients with all diseases).
In Re: Entresto -Written Description and Enablement Do Not Have To Be Complicated.
WHDA CAFC Alert | January 16, 2025
In re: Entresto; Novartis Pharm. Corp. v. Torrent Pharma Inc. et al.
Date of Decision: January 10, 2025
Before: LOURIE, PROST, and REYNA.
Summary:
The Federal Circuit reversed a finding by the District of Delaware that the drug patent covering the heart drug, Entresto was invalid for failing to provide a written description of future embodiments wherein a combination of two drugs where formed in a chemical complex. The Federal Circuit found that the District Court had erred by interpreting the written description requirement as demanding that a future embodiment needed to be adequately described in the patent in order for the claim to be valid. Instead, the CAFC noted that any written description sufficient to describe the claim satisfies the requirement.
Background:
The U.S. District of Delaware determined that claims 1-4 of U.S. Patent 8,101,659 (“the ’659 patent”) owned by Novartis were shown to be invalid for lack of written description. The ‘659 patent covers the heart failure treatment drug, Entresto. Entresto combines two different drug therapies, valsartan and sacubitril, in a specific form known as a “complex,” which combines the two drugs into a single unit-dose-form through weak, non-covalent bonds. During the District Court proceeding there had been a dispute as to the claim construction of the aspect of claim 1 “wherein said [valsartan and sacubitril] are administered in combination.” The District Court gave the term its plain and ordinary meaning as Novartis had argued for.
As a result of this construction, the District Court interpreted the claim to cover valsartan and sacubitril as a physical combination and as a complex (i.e. as used in Entresto). Torrent argued that the ’659 patent was required to enable and describe such complexes, since a patent must enable and describe the full scope of the claims. However, overwhelming evidence (in the form of later patents) showed that the complex of the two drugs was not invented until after the ‘659 patent issued.
As to enablement, the District Court found that because enablement is judged as of the priority date, later-existing state of the art may not be properly considered in the enablement analysis. As to written description, the District found because it was undisputed that complexes were unknown to a person of ordinary skill in the art, “‘[Novartis] scientists, by definition, could not have possession of, and disclose, the subject matter of [such complexes]’ and therefore, ‘axiomatically, [Novartis] cannot satisfy the written description requirement’ for such complexes.”
Novartis appealed. MSN (one of the Torrent defendants) remained for the appeal arguing that either the District Court’s written description determination should be affirmed or the enablement determination reversed.[1]
Discussion:
The CAFC took immediate issue with the manner in which the District Court had interpreted the written description requirement, noting that: “The issue is not whether the ’659 patent describes valsartan-sacubitril complexes. Because the ’659 patent does not claim valsartan-sacubitril complexes, those complexes need not have been described.” (Emphasis in original).
The Court restated the settled law that: “A specification adequately describes an invention when it ‘reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date.’” Juno Therapeutics,Inc. v. Kite Pharma, Inc., 10 F.4th 1330, 1335 (Fed. Cir.2021) (quoting Ariad Pharms. Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc)). They then noted that the claim construction had given the term “administered in combination” its plain and ordinary meaning, and that the specification provided ample description of the two drugs being administered together. Therefore, concluding that the claim had adequate written description support and that the District Court had “erroneously conflated the distinct issues of patentability and infringement, which led it astray in evaluating written description.”
Turning to enablement, the CAFC reiterated that the same is true -that it is the claim that must be enabled and not future potential embodiments which are the subject of infringement. Thus, the Circuit Court affirmed the District’s interpretation of enablement.
The district court correctly recognized that valsartan-sacubitril complexes, which include the claimed invention along with additional unclaimed features, are part of a later-existing state of the art” that “may not be properly considered in the enablement analysis.”
Conclusion:
The CAFC concluded that the District Court had erred in finding there was insufficient written description support and reversed and affirmed the District Court’s finding that the claims of the ‘659 patent are enabled.
Take away:
- When reviewing issues of written description and enablement, the review must center on the claim language and the claim construction thereof being supported by the patent.
- Future embodiments of a claim which could not possibly be enabled or described within the patent may still infringe the claim if they read on all the terms thereof as construed. Enablement and written description are issues of patentability not infringement.
[1] Issues of obviousness and indefiniteness were also raised but are not covered herein.
