Unocal vs. Valero: Patent Infringement on Cleaner Burning Gasoline

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Unocal vs. Valero Patent Infringement on Cleaner
Burning Gasoline

• Adriana Winfield
• UC Berkeley, Chemical Engineer
• November 3, 2008
• IEOR 190G

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Unocals Background

• Founded in 1890 in Santa Paula, California
• Independent petroleum company until 2005
• Merged with Chevron Corporation

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Valeros Background

• Founded in 1980s in San Antonio, Texas
• 3.3 million barrels of oil per day
• Largest refinery in North America

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vs.

• In 2002, Unocal sued Valero for patent
  infringement on patents 393 and 126
• Patents discuss cleaner-burning gasoline
• A loss for Valero would cost them 17.25 cents for
  every gallon refined allegedly using Unocal's
  patented process

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Refinery
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Patent 5,288,393
Unleaded lead lt 0.05gram lead/gallon
CnH2n2
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Patent 5,288,393
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Patent 5,288,393
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Patent 5,288,393
Fuel Injection System
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Patent 5,288,393
Decreasing 50 D-86 distillation point gt
decrease in hydrocarbons and CO
emissions Decreasing Reid Vapor Pressure gt
decrease in NOx emissions 10 D-86 Distillation
point decrease gt decrease in NOx emissions
Olefin decrease gt decrease in NOx emissions
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Patent 393 Specifications

• Describes benefits and methods of varying
  gasoline characteristics.
• 1) relationships among fuel characteristics and
  CO, NOx, and HC emissions,
• 2) characteristics most important for emissions
• 3) specific desirable ranges for RVP, T10,
  T50,olefins, paraffins, and aromatics
• Patent 126 made it covers every single gallon of
  California summer CARB, a state agency, gasoline

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Valeros Response

• We believe the patents are invalid because we
  believe that Unocal violated anti-competitive
  laws, - Bill Greehey, chairman of the board and
  CEO of Valero.

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Who wins?

• U.S. Patent and Trademark Office examiner on Dec.
  18 rejected Unocal's claim to patent rights for
  its "393" gasoline
• Patent office found that Unocal did not invent
  anything new or novel because the '393'
  compositions were so close to prior compositions
• The Federal Trade Commission charges Unocal with
  patent ambush and illegal anticompetitive
  conduct.

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Thank You!

• Thank you for listening. Are there any questions?