press release

New Unocal gasoline patent could have broader application for U.S. refiners

El Segundo, Calif., Dec. 9, 1998 - Unocal Corporation today said it was recently granted an additional patent for low-emission gasolines that could have application to various cleaner burning motor fuels throughout the nation.

"This new patent represents further protection for cleaner burning gasolines that Unocal invented in 1990," said Roger C. Beach, Unocal chairman and chief executive officer. "In some respects, the new patent's claims are broader than those in the earlier patent that Unocal was granted in 1994."

The new patent (No. 5,837,126) was issued on Nov. 17, 1998, and is an outgrowth of the emissions reducing gasoline patent (No. 5,288,393) that was upheld by a U.S. District Court jury.

Unocal has sent letters to all U.S. refiners advising them about the company's patents and the court's decisions. The company indicated its willingness to discuss the scope of Unocal's patent claims with these refiners. The earlier "393" patent has particular application to gasolines manufactured to comply with California's Phase II regulations. The broader claims of the "126" patent may have application throughout the United States, as well.

"We believe that this new patent, coupled with the claims of the earlier '393' patent, offer a significant potential revenue stream to Unocal," Beach said. The earlier court decision is currently being appealed by the six defendant companies.

The company said that the Federal Circuit's review of that trial record will not be affected by the issuance of this new patent, nor will any decision by the Federal Circuit affect the validity or enforceability of the new patent.

The new "126" patent expands certain aspects of the claims of the earlier "393" patent. Unocal's research recognized that emissions of nitrogen oxide, carbon monoxide and hydrocarbons can be reduced by altering distillation boiling points, Reid Vapor pressure, or the olefin, aromatic or paraffin content of the gasoline. The new patent outlines 66 additional claims regarding combinations of these properties and production and distribution methods. Neither patent requires nor excludes the use of MTBE.

"We believe that motor gasolines falling within the claims of the new patent offer significant air quality benefits, compared with old, traditional gasolines," Beach said. "This new patent includes claims that not only recognize the breadth of our original invention, but also bring benefits to congested areas such as Los Angeles."

Background

Earlier this year, Unocal successfully completed a trial in Federal District Court involving issues of patent infringement and validity against six major California refiners. At trial, the jury found that approximately 1.2 billion gallons of motor gasoline made by the defendants between March 1, 1996, and July 31, 1996, infringed on Unocal's "393" patent.

In the damages phase of that trial, the jury awarded Unocal a reasonable royalty of 5.75 cents per infringing gallon. With interest and attorney's fees, the final judgement for infringement by the six defendants was $84 million.

The court has entered an order for an accounting of the defendants' infringing gallons since Aug. 1, 1996. The defendants have appealed the final judgement to the Court of Appeals for the Federal Circuit. The accounting ordered by the District Court will not take place until the conclusion of that appeal.

Updated: December 1998