UNOCAL'S CALIFORNIA RFG PATENT UNDER LEGAL ATTACK BY SIX COMPANIES

Unocal Corp. has vowed to aggressively defend its reformulated gasoline patent that is under legal attack in the U.S.

Tailored to meet California state emissions standards, Unocal's RFG patent is the object of a lawsuit filed by six other major oil companies that will sell RFG in California.

The other majors - ARCO, Chevron Corp., Exxon Corp., Mobile Corp., Shell Oil Co., and Texaco Inc. - filed the suit last month seeking to invalidate Unocal's patent for RFG formulated to meet California Air Resources Board's mandatory Phase 2 specifications that will take effect Mar. 1, 1996 (OGJ, Apr. 24, p. 35).

In seeking a judge's ruling, the six challengers claim Unocal's patent allows it to charge a royalty on all Phase 2 gasoline sold in the state. The plaintiffs also say RFG cannot be patented because it is the result of many different formulations by a number of companies over the years.

UNOCAL'S COUNTERCLAIM

Unocal filed a response and counterclaim in the U.S. District Court for the Central District of California in response to the suit.

"We intend to aggressively defend the validity of our patent in the courts," said Unocal Chief Executive Officer Roger C. Beach. "We filed the counterclaim because we believe our patent is valid. In fact, the plaintiffs admitted in their lawsuit they are infringing on our patent."

Unocal received the patent Feb. 22, 1994, for new and non-obvious gasoline formulations that reduce automotive emissions. That patent covers many of the formulations refiners might find practical to manufacture to comply with CARB Phase 2 RFG regulations, the company said.

"We are committed to ensuring that our patent does not impede the smooth introduction of Phase 2 RFG next year," Beach said. "I personally assured Gov. (Pete) Wilson we will not seek injunctive relief that would interfere with introduction of Phase 2 gasoline in 1996.

"Unocal's fuel scientists concluded in late 1989 that the auto/oil research program was not going to tell us how to reformulate gasoline to reduce emissions. Our scientists instead pursued their own theories on how to reduce vehicle emissions. The result of this independent research was a unique set of gasoline characteristics."

The auto/oil study, conducted by 11 oil companies, including the six plaintiffs, and the three major U.S. automakers, gave each company the right to engage in independent research, Unocal pointed out.

In addition, companies that undertook independent research were not obligated to disclose to the program and other members the fact that such research was undertaken or the nature of the results, the company said.

Unocal filed its patent application in December 1990. In 1991, CARB began developing Phase 2 air emissions regulations.

Last Jan. 31, Unocal disclosed the patent award and said it would license the process to any refiners, although it did not disclose licensing specifics.

PLAINTIFFS RESPOND

An attorney for the six plaintiffs said Unocal failed to answer the substance of the complaint filed against it.

"The gasoline formulations claimed by Unocal are not new," said John Diaz of the law firm Morgan & Finnegan. "They are in the public domain and cannot be legitimately patented."

Citing Unocal's claim that it engaged in independent research, Diaz said, "If Unocal carried out any independent research, it was a misguided effort, since Unocal's patent relates to old gasoline formulations already in the public domain.

"Unocal also suggests the plaintiffs brought an action for declaratory judgment in an effort to avoid a jury trail. Just the opposite is true. The six oil companies are seeking a declaratory judgment so they can obtain an early determination, either by the court or a jury, that Unocal's patent is invalid."