Unocal Fuel Patents Scrutinized

The U.S. Federal Trade Commission (FTC) is investigating Unocal Corp. to determine whether it illegally kept patents secret while helping set industry standards, the USA Today has learned.

The paper quoted sources familiar with the investigations as saying that the FTC was looking into whether the firms did not disclose patents or applications that later required companies to pay them royalties. The FTC had confirmed it was investigating Unocal, the report said.

The investigations signaled the FTC's growing interest in standard setting -- companies working together to set common specifications for products so they can easily be used with related equipment.

"This is an area whether there is a lot of impact on consumer welfare, and you can get a lot of bang for your buck," USA Today quoted FTC antitrust chief Joseph Simons as saying. But it said he refused to discuss specific probes.

In the case of El Segundo, Calif.-based Unocal, which owns several patents for cleaner-burning fuels, the FTC was looking into its patent for clean-fuel formulations while helping draft new gasoline standards that the oil companies said virtually mandate Unocal's process.

The report said that all three companies had filed patent infringement lawsuits against firms they say owed them royalties. But the litigation backfired when those firms counter-sued, charging them with concealing their patents, and complained to the FTC.
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