Lockyer Pushes for Review of Unocal Patent

Siding with most oil companies that supply gasoline to California, Atty. Gen. Bill Lockyer filed a brief with the U.S. Supreme Court on Thursday urging that the high court review a lower court ruling that El Segundo-based Unocal Corp. owns patents on cleaner-burning gasoline.

At issue is a patent held by Unocal on cleaner-burning reformulated gasoline, which critics contend holds the potential to raise gasoline prices by 5 cents a gallon.

The company won a $91-million settlement against five of the world’s largest oil refiners for infringing on the patent. A jury ordered the refiners to pay Unocal 5.75 cents a gallon on 1.2 billion gallons produced in California during a five-month period in 1996.

Lockyer organized support from attorneys general from 32 other states who also signed the brief, which argues that the value of Unocal’s patent stems from its similarity to gasoline manufacturing regulations required by California to improve the state’s air quality.

Lockyer has criticized oil companies for price spikes since he took office last year. But on this issue, he is siding with most major oil companies, including BP Amoco and Chevron.

Lockyer accused Unocal of developing the patent in secret while the company was involved in discussions with its competitors and the state to develop the regulations. He cautioned the high court that other companies may seek patents for other products that a state may require for public health and safety.

Unocal spokesman Barry Lane said his company was “very disappointed” that the other attorney generals signed the brief.

“Unfortunately the [attorneys general] are trying to make this a consumer price issue,” Lane said. “This is absolutely a patent issue.

“Our invention was well ahead of the regulatory process,” he added.

A federal appeals court panel upheld the patent in March and the full appeals court declined to rehear the case despite a petition by Lockyer, who claims the patent will increase gas prices in California by a nickel a gallon.

Lockyer argues in the brief that the lower court decision “potentially allows Unocal to monopolize the retail gasoline market, and significantly increase the price consumers pay for gasoline.” His office contends that there is some consensus that the patent in question, along with four other similar patents held by Unocal, have already increased prices.