Unocal Corp. has come out on top in the early round of its patent-infringement trial against six other California refiners.
The California oil company sued the six for making fuels that meet gasoline formulas patented by Unocal.
The defendants blended the fuels in question to meet specifications handed down by the California Air Resources Board (CARB). These Phase II CARB reformulated gasoline (RFG) specifications were devised after Unocal filed its patent request in December 1990.
Unocal hit an astonishing stroke of luck when it discovered that the patent, awarded in 1994, encompassed the gasoline specifications that were subsequently mandated by CARB (OGJ, Jan. 8, 1996, p. 43).
CARB Phase II RFG is the only gasoline sold in the state, which has demand of about 1 million b/d.
The lawsuit
In 1995, Unocal sued ARCO, Chevron U.S.A. Inc., Mobil Corp., Shell Oil Co., Exxon Corp., and Texaco Refining & Marketing Inc., saying the companies had violated Unocal's patent when they blended summertime gasoline to meet California's strict requirements (OGJ, May 15, 1995, p. 22). Although the jury found in favor of Unocal, it has yet to award damages in the case.
Unocal has asked for 5-7.5¢/gal on 1.2 billion gal of gasoline produced from Mar. 1, 1996, to July 31, 1996. The six defendants countered with a suggestion of 0.2¢/gal.
Before handing the damages phase of the trial over to the jury for deliberations, U.S. District Judge Kim Wardlaw told the jury it must award Unocal a reasonable royalty.
The jurors' assessment could cost the defendants tens of millions of dollars. If Unocal is allowed to charge royalties on gasoline made between summer 1996 and the date the jury hands down its verdict on damages, the company stands to make hundreds of millions of dollars.
The jury must make two more determinations in the case: whether the defendants intentionally violated the patent and whether the patent is enforceable. ARCO has said it will likely appeal the verdicts.
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