Election Section

Unocal sues Valero over summer gas formula’s royalties

The Associated Press
Friday January 25, 2002

LOS ANGELES — Unocal Corp. has opened a new chapter in its legal battle to collect royalties on sales of cleaner-burning gasoline by suing Valero Energy Corp. for alleged violations on its patent for the fuel. 

The civil complaint, filed Tuesday in a Los Angeles federal court, echoes claims Unocal has made in a long-running dispute with several other oil giants. The latest suit also adds a new twist. 

With the Valero complaint, Unocal is alleging the refiner violated a patent for producing the cleaner-burning gasoline sold during the summer months. 

Unocal so far has won legal rulings upholding its patent for gasoline made during other times of the year. 

Valero and other oil giants say Unocal’s patent claims are invalid. They warn that consumers will end up paying more for gasoline if Unocal is empowered to collect royalties of up to 5.75 cents per gallon. Unocal says it is willing to license its gasoline-making formula for as little as 1.2 cents per gallon. 

In its complaint, Unocal alleges San Antonio-based Valero has shown “complete disregard” for its gasoline patents. 

Valero described Unocal’s suit as “an incredible slap in the face of the California motoring public.” If Unocal wins the right to collect royalties, Unocal estimates Californians will pay an additional $580 million for gasoline sold in the summer. 

By some estimates, the legal victories that Unocal has already won could drive up gasoline prices nationwide by $1.1 billion annually. Unocal says those estimates are inflated and doubts its rivals will pass on the expense to motorists.