In Fintiv, Inc. v. PayPal Holdings, Inc., No. 23-2312 (Fed. Cir. Apr. 30, 2025), the Federal Circuit affirmed the Western District of Texas’s ruling that the asserted patent claims were invalid as indefinite. The decision underscores the court’s continued enforcement of 35 U.S.C. § 112 ¶ 6 for software-related terms that fail to recite sufficient structure, extending the line of cases exemplified by Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015).
Background
Fintiv asserted four patents—U.S. Patent Nos. 9,892,386, 11,120,413, 9,208,488, and 10,438,196—relating to a cloud-based mobile transaction system. At issue were various claims referring to a “payment handler” or “payment handler service” that either (1) used APIs of various payment processors or (2) exposed a common API for interacting with them.
The district court, applying § 112 ¶ 6, found the payment-handler terms to be means-plus-function limitations and held the claims indefinite for failure to disclose corresponding structure. Fintiv appealed.
Key Holdings
1. The Payment Handler Terms Invoke § 112 ¶ 6
The Federal Circuit agreed with the district court that the “payment handler” and “payment handler service” terms were functional, lacked sufficient structural meaning, and thus invoked § 112 ¶ 6. Although these terms did not use the word “means,” the court found that the presumption against § 112 ¶ 6 was rebutted under Williamson, which allows application of § 112 ¶ 6 when a term “recites function without reciting sufficient structure for performing that function.”
The panel emphasized that:
- “Handler” is akin to “module,” a term previously found by the court to lack structural significance.
- Appending the term “payment” did not supply structure but merely described a function.
- Expert testimony indicated that a person of ordinary skill would not understand how to implement the recited functions based on the claim language alone.
Fintiv’s reliance on Dyfan, LLC v. Target Corp., 28 F.4th 1360 (Fed. Cir. 2022), was unpersuasive. Unlike Dyfan, where unrebutted expert testimony supported structure, here neither party’s expert testified that “payment handler” connoted a definite structure.
2. Lack of Corresponding Structure in the Specification
Once § 112 ¶ 6 was triggered, the court found that the patents failed to disclose any algorithm or adequate structure for the “payment handler” functionality. Merely restating the claimed function—“wrap[ping] APIs” and “expos[ing] a common API”—did not meet the requirement.
Citing Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 521 F.3d 1328 (Fed. Cir. 2008), and Rain Computing, Inc. v. Samsung Electronics America, Inc., 989 F.3d 1002 (Fed. Cir. 2021), the court reiterated that describing only a general-purpose computer without a specific algorithm is insufficient.
Fintiv’s attempt to point to a supposed two-step algorithm was rejected as merely a restatement of the claim language. The court also dismissed the idea that the figures in the patents showed a structural implementation of the payment handler, noting a lack of clarity on how the functions were performed or how different APIs were integrated.
Implications
This decision adds to the growing body of Federal Circuit case law demanding structural specificity in software patent claims. Key takeaways include:
- Terms that combine a generic function descriptor with a purpose (e.g., “payment handler”) are increasingly likely to be swept into § 112 ¶ 6 territory if not clearly supported by structural description.
- Boilerplate specification language that simply mirrors claim terms without detailing implementation will not rescue functional claims.
- Practitioners should be cautious in relying on software terms like “service,” “module,” or “handler” without anchoring them to known, sufficiently detailed structures or algorithms in the specification.
Conclusion
Fintiv v. PayPal reiterates that when it comes to software patents, claiming a function is not enough—patentees must disclose how the function is performed with sufficient specificity. This decision reinforces the Federal Circuit’s post-Williamson trajectory and continues the tightening of indefiniteness doctrine in the software space.
By Charles Gideon Korrell