Patent Suit Against Unocal Revived
An engineer won a round Monday in a lawsuit that alleges El Segundo-based Unocal Corp. stole his formula for a less-polluting gasoline.
The U.S. Supreme Court sent the suit, filed by William Talbert of Allentown, Pa., back to a federal appeals court in California to reconsider the claims against the oil company in light of a high court ruling in May that broadened patent rights for inventors.
Talbert’s suit is separate from patent infringement litigation that Unocal is pursuing against five major competitors that produce cleaner-burning gasoline, which Unocal has estimated could bring in annual revenue of as much as $150 million when a resolution is finally reached.
The Supreme Court order represents the first major legal victory for Talbert, 70, since his lawsuit was filed in 1998. A lower court had dismissed the suit on the grounds that Unocal’s gasoline had different characteristics from Talbert’s fuel, and the U.S. Court of Appeals for the Federal Circuit upheld that ruling in January.
“The reason it feels so good is I had a lot of doubts about fighting Big Oil in the court system, but now I feel we’ll get a good decision,” said Talbert, whose legal team includes Harvard Law School professor Arthur Miller and Melvyn I. Weiss of Milberg Weiss Bershad Hynes & Lerach, a national law firm known for class-action securities litigation.
Talbert’s lawyers portrayed the case as a David-versus-Goliath matchup with important implications for the other gasoline patent case, in which Unocal is trying to wring damages from five major oil companies for infringing its patent for cleaner-burning gasoline. Unocal won that suit in 1997, but a proceeding to determine damages is being delayed by federal regulatory investigations into whether Unocal received the patent improperly.
However, lawyers for Unocal and another defendant, Tosco Corp., said the Supreme Court order is narrowly focused and unlikely to change the outcome of the Talbert case or the other, even bigger patent lawsuit.
Although testimony in the Talbert case centered on arcane matters such as the boiling point of various grades of gasoline, a key claim by Talbert was that Unocal stole his idea to make a cleaner-burning gasoline after he shared details of his then-pending patent with Unocal in 1989.
Unocal, which expressed no interest in Talbert’s invention, got its own patent in 1994 on a form of cleaner-burning gasoline designed to meet California’s clean-air mandates. The Unocal patent became the center of an intense legal battle between Unocal and virtually the rest of Big Oil over whether Unocal secretly secured a patent using shared research with other oil companies.
The gasoline patent lawsuit, Talbert Fuel Systems Patents Co. vs. Unocal Corp. and Tosco Corp., is one of several bounced back to lower courts because of the Supreme Court’s decision in May in Fesco Corp. vs. Shoketsu Kinzoku Kogyo Kabushiki Co.
That ruling gave inventors wider latitude to sue makers of competing products that are similar to the original patent but don’t exactly copy it.
Tosco., which is now part of ConocoPhillips, was named in the suit because it purchased Unocal’s refineries.
In other rulings, the Supreme Court:
* Rejected calls by Exxon Mobil Corp., Dow Chemical Co.'s Union Carbide and other companies to halt a West Virginia asbestos trial that at one time involved claims by 8,000 people exposed to the cancer-causing fiber.
The justices, without comment, let the trial that began Sept. 23 go forward, letting stand a West Virginia state court decision. The case, which had involved about 250 companies, has been scaled back as all but a few have settled.
* Turned down challenges to the $246-billion nationwide tobacco settlements by a smoker and by reduced-toxin cigarette maker Star Scientific Inc., which didn’t sign the accords and yet has been forced to put more than $33 million in escrow.
* Rejected phone customers’ challenge to SBC Communications Inc.'s $81-billion purchase of Ameritech Corp. in 1999, which created the nation’s largest telecommunications company.
* Boosted a challenge by bar-code scanner makers to patents that have cost companies more than $1 billion in licensing fees. The justices rejected an appeal by the Lemelson Medical, Education & Research Foundation, which owns the patents.
Bloomberg News was used in compiling this report.