## Facts

- Travelers Express Co. owned patents covering money-order dispensing and processing technology.
- Travelers sued American Express Integrated Payment Systems, Inc. (IPS) and American Express Travel Related Services, Inc. (TRS) in 1994 for patent infringement involving defendants’ money-order products.
- After a December 1994 settlement conference, the parties signed a handwritten term sheet stating the infringement claims were resolved “through a license,” conditioned on a later definitive agreement.
- The parties later executed a brief written statement that they had reached a settlement as of December 14, 1994, and authorized a press release stating a licensing agreement existed and IPS would pay a substantial sum for use of Travelers’ patents.
- IPS tendered an initial $3 million royalty payment, which Travelers accepted; IPS later paid total royalties of about $8.7 million and invested more than $34 million in products using the patented technology.
- Travelers repeatedly represented publicly and in court that the patent litigation was settled and that IPS was licensed.
- The parties never reached final detailed license terms; in June 1998, the court ruled no enforceable settlement agreement existed, reviving the infringement action.
- IPS and TRS asserted implied license and related estoppel defenses based on Travelers’ conduct; both sides filed cross-motions for partial summary judgment.

## Issues

1. Whether Travelers’ objective post-1994 conduct (accepting royalties, announcing a license, and treating the case as settled) created an implied nonexclusive patent license permitting IPS’s use of the patented technology despite the absence of an enforceable written settlement.
2. Whether Travelers was equitably estopped from denying or revoking license rights because IPS allegedly relied on Travelers’ conduct by paying royalties and making substantial investments.
3. Whether the scope and duration of any implied license or estoppel could be determined as a matter of law on summary judgment.

## Decision

- The court granted in part and denied in part the cross-motions for partial summary judgment.
- The court held Travelers’ conduct could support an implied license and/or equitable estoppel as to some uses of the patented technology.
- The court declined to rule, as a matter of law, that IPS held an implied license covering all accused activities or that Travelers was completely barred from asserting infringement.
- Because material fact disputes remained—particularly about the intended and reasonably understood scope of permission—the court reserved scope, reliance, and related infringement issues for trial.

## Legal Principles

- An implied patent license may arise from a patentee’s objective conduct amounting to an affirmative grant of consent to make, use, or sell a patented invention.
- The scope of an implied license is limited to the scope of the patentee’s objective manifestations of consent; disputed understandings about coverage commonly present fact questions.
- Equitable estoppel in patent cases generally requires (1) misleading conduct by the patentee indicating the accused conduct is permitted, (2) reliance by the accused infringer, and (3) material prejudice if the patentee is allowed to proceed with an infringement claim.
- The absence of an enforceable settlement contract does not foreclose implied license or equitable estoppel; noncontractual consequences can arise from post-negotiation course of dealing, including acceptance of royalties and public representations of licensing.

## Conclusion

The court ruled that Travelers’ acceptance of royalties and representations of a license could support implied license and equitable estoppel defenses, but factual disputes about what permission was conveyed and reasonably relied on prevented summary judgment on the full scope of any license or on a complete bar to infringement claims.


Travelers Express Co. v. American Express Integrated Payment Sys., Inc., 80 F. Supp. 2d 1033 (D. Minn. 1999)