States join opposition to Unocal patent

California Atty. Gen. Bill Lockyer has told the US Supreme Court that Unocal Corp. should not be allowed to "hijack and distort" the state regulatory process by claiming a patent on reformulated gasoline formulas developed in cooperation with the government.


California Atty. Gen. Bill Lockyer has told the US Supreme Court that Unocal Corp. should not be allowed to "hijack and distort" the state regulatory process by claiming a patent on reformulated gasoline formulas developed in cooperation with the government.

In a friend-of-the-court brief supported by 33 other states, Lockyer followed the lead set by seven members of US Congress and urged the Supreme Court to overturn lower court rulings that require six major oil companies in California to pay patent royalties to Unocal for RFG (OGJ Online, Sept. 18, 2000).

He said Unocal patent's value stems from its similarity to California's cleaner-burning gasoline regulations, developed to improve air quality. He noted that Unocal developed the patent in secret while involved in California's industry-government partnership to develop these regulations. Unocal's inventors admitted that they modified the patent to resemble California's regulations.

The amicus curiae brief was filed in the case of Atlantic Richfield Co. et al v. Union Oil Company of California. In 1997, a US District Court jury in Los Angeles found that six major oil companies had infringed on a Unocal patent on clean-burning gasoline used in California.

The companies were ordered to pay Unocal 5.75 �/gal on 29% of the gasoline produced, or over $69 million, plus interest, for the 5 months at issue. A federal appeals court upheld the patent earlier this year. ARCO, Chevron Corp., ExxonMobil Corp., Shell Oil Co., and Texaco Inc. have appealed the ruling to the US Supreme Court.

The California brief argued that the lower court decision "potentially allows Unocal to monopolize the retail gasoline market, and significantly increase the price consumers pay for gasoline" since the state requires the use of the clean-burning fuel.

He cautioned that other companies may seek patents for other products that the state may mandate for public health and safety. He asked the high court to protect the states from having companies use the patent system to "distort and plunder" state regulatory processes.

Joining California in the suit were: Alabama, Arizona, Arkansas, Colorado, Delaware, Georgia, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, and the District of Columbia.

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