FTC Probing Complaint Filed Against Unocal

Unocal Corp. said the Federal Trade Commission has begun investigating a complaint by rival ExxonMobil Corp. that it unfairly uses its patents for cleaner-burning gasoline.

El Segundo-based Unocal disclosed the investigation in a quarterly filing with the Securities and Exchange Commission, saying it received word about the unfair competition inquiry from the FTC on Monday.

Five patents held by Unocal cover formulations for blending gasoline that meets federal anti-smog standards imposed at about one-third of the nation’s pumps, including those in population centers of the West Coast, Midwest and Northeast.

The patents, which forced producers of reformulated gasoline to eliminate or reduce their production for fear of being sued, were blamed for higher gasoline prices.

ExxonMobil, which filed its complaint with the FTC in May, and other major oil companies have taken Unocal to court over the patents.

Unocal said in its filing that Exxon claims it engaged in anti-competitive conduct in the regulatory processes that created California and federal standards for reformulated gasolines (RFG) and therefore gained “monopoly profits” in the RFG market.

In the second quarter of 2001, Unocal entered into licensing agreements that gave gasoline producers, including Citgo Petroleum Corp. and Tesoro Petroleum Corp., the right to make cleaner burning gasolines using formulations patented by Unocal.

Unocal has said it continues to work with other refiners, blenders and importers on licensing deals for the cleaner-burning gasoline patents.

Unocal shares rose 43 cents to close at $35.80, while Exxon shares dropped 25 cents to close at $41.15, both on the New York Stock Exchange.