Phillips 66 fined $604.9m in trade secrets case
Energy giant Phillips 66 was hit with a significant legal setback as a California jury awarded biofuel company Propel Fuels $604.9m in damages. The verdict stems from a lawsuit accusing Phillips 66 of stealing Propel’s trade secrets to develop its own competing renewable fuel business.
According to the lawsuit, Phillips 66 approached Propel in 2017 with interest in acquiring the company and expanding its renewable fuel operations in California. During the negotiations, Propel shared confidential information about its business strategies, financial data, and proprietary technology.
However, Phillips 66 abruptly withdrew from the deal in 2018 and subsequently launched its own renewable fuel business.
Propel argued that Phillips 66 had used this stolen information to gain a competitive advantage in the California market, which has strong incentives for low-carbon fuel alternatives. The jury agreed, finding that Phillips 66 had violated California’s trade secrets law.
Phillips 66 recently announced that their Rodeo site will begin SAF production from the third quarter of 2024.
In a statement, a spokesperson for Phillips 66 expressed disappointment with the verdict but maintained the company’s belief in its case. “We are confident in our legal position and will carefully consider all available options moving forward,” the spokesperson said.
Propel, a Sacramento-based company specialising in low-emission gasoline and diesel fuel, hailed the verdict as a victory for innovation and fair competition.
“Propel Fuels is pleased that after viewing all of the evidence, the jury held Phillips 66 accountable for stealing our trade secrets,” said Rob Elam, founder and CEO, Propel Fuels.
“Before its discussions with Phillips 66, Propel had worked for more than 13 years to create the market for these fuels, which are important alternatives that improve air quality and help fight climate change. We were pioneers who helped create the market, and what Phillips 66 stole was the result of hard work by entrepreneurs who took the kind of risks that are the foundation for our entire modern economy.”
The verdict could have significant implications for the renewable fuel industry, as it highlights the importance of protecting proprietary information and preventing larger companies from exploiting smaller competitors.