Thursday, August 7, 2014

Unocal holds up California

Every state has their own summer gasoline formula to reduce pollution. After California Air Resources Board decided to use Unocal's formulation--and after the refiners sunk billions of dollars re-tooling to produce CARB gasoline--Unocal said "Oh by the way, we have patent on the formula" and charged them a royalty of five cents/gallon.

The FTC sued Unocal for illegally acquiring monopoly power, but a judge dismissed the complaint in 2003 basically because the patent laws "trump" the antitrust laws, and allow a patentee to do what they want with their patents (this is NOT true in the EU and is changing in the US).

But the FTC got the relief they wanted when Chevron put the patents in the public domain as a condition for approving the Chevron/Unocal merger.

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