ExxonMobil asks FTC to investigate Unocal's gasoline patents

ExxonMobil Corp. and the National Petrochemical & Refiners Association each have asked the US Federal Trade Commission to investigate reformulated gasoline patents held by Unocal Corp. Neither the FTC or ExxonMobil has contacted Unocal, a Unocal spokesman said. The FTC requests are the latest in a series of challenges regarding Unocal's patents.


Paula Dittrick
OGJ Online

HOUSTON, May 9 -- ExxonMobil Corp., Irving, Tex., and the National Petrochemical & Refiners Association have asked the US Federal Trade Commission to investigate reformulated gasoline patents held by Unocal Corp., El Segundo, Calif.

"We contend Unocal gained a monopoly over a legally mandated product, and there are antitrust issues," ExxonMobil spokeswoman Lauren Kerr said.

ExxonMobil asked for an FTC investigation in late March after the Supreme Court upheld Unocal's reformulated gasoline (RFG) patent rights by refusing to hear an appeal.

The NPRA sent the FTC a letter on Apr. 18 asking for an investigation. Bob Slaughter, NPRA counsel, said the group considers the patent to be an unfair trade practice.

"We just feel that the impact of the patent -- which is to put a surcharge on certain energy suppliers -- is of no benefit to anyone save Unocal," Slaughter said.

He compared the situation to a patents case involving Dell Computer Corp. He said Dell was involved in a private computer standards-setting organization and its representative did not realize Dell had patents applying to issues before the organization.

Later, Dell sought to collect royalties on its patents, but the FTC ruled against Dell, Slaughter said.

Unocal participated in RFG standards committees while it had a patent pending on RFG formulas, Slaughter said.

"There seems to be a basis for the FTC to look into this," Slaughter said, adding he believes Unocal's patents "may add hundreds of millions of dollars annually to the RFG programs."

In 1995, several refiners sued to overturn the Unocal patents. Unocal filed a counter suit, alleging the refiners were infringing on its patent rights. Federal courts upheld Unocal in the case.

Several integrated oil companies appealed the ruling to the US Supreme Court, which declined to hear the case, thus upholding the lower court rulings (OGJ Online, Feb. 20, 2001).

Unocal spokesman Barry Lane said neither FTC nor ExxonMobil had contacted Unocal.

"There is no antitrust or monopoly issue here," Lane said, adding previous trial testimony indicated that most refiners are blending around the Unocal patents and producing reformulated gasoline that does not infringe Unocal's patents.

"ExxonMobil CEO Lee Raymond last year said they weren't infringing at all. He said that at their annual meeting," Lane said.

Contact Paula Dittrick at pdittrick@ogjonline.com

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