Unocal Patent Rejected

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Unocal Patent Rejected

EL SEGUNDO, Calif. -- In a victory for oil refiners in the United States, the U.S. Patent and Trademark Office has preliminarily rejected a clean-burning gasoline patent by Unocal Corp. However, the California-based company said the patents would survive the process.

If the patents survive and Unocal is successful in lawsuits to collect royalties on the patents, gasoline prices could rise because competing refiners could make less cleaner-burning fuel or fold payments to Unocal into the price of a gallon of gas, according to the Associated Press.

This would be the second initial rejection of a patent for the refiner, which is seeking to collect fees from other refiners for using processes that make cleaner-burning gasoline.

In February, the government initially rejected Unocal's patent for the "393" blend and formula to make cleaner-burning "reformulated" gasoline. This week, Unocal's "126" patent was initially rejected.

The patents are still in force, and Unocal will continue to receive revenue from eight companies that it licenses to use the patents to make reformulated gasoline, the report said.

Unocal received a patent for the "393" formula in February 1994 and for the "126" formula in November 1998. The company claims that any other refiners making gasoline using these methods and components must compensate Unocal and could collect hundreds of millions dollars if it wins in court.

Four major refiners are involved with a suit against Unocal regarding the "393" formula: Exxon Mobil Corp., BP Plc., ChevronTexaco Corp. and Shell Oil Co.

Valero is in court against Unocal in a separate suit involving both formulas Unocal has under patent.

Unocal has also signed agreements with eight refining companies since last year, including Citgo Petroleum Corp., Williams Energy, and Tesoro Petroleum Corp., giving them the right to produce and blend the patented cleaner-burning gasolines for a fee of between 1.2 and 3.4 cents per gallon, according to the Associated Press.