Supreme Court Sides With Unocal.

Rejecting appeals by five major oil companies, the Supreme Court upheld a disputed patent for clean-burning gasoline that could add several cents per gallon to the price at the pump in California.

The oil companies will have to pay royalties for their use of the reformulated gasoline to Unocal Corp. of El Segundo, which sold its refineries and gas stations to Tosco Corp. in 1997 but retained ownership of its gasoline patents. The reformulated gasoline is standard in California and used in many urban areas around the country.

The impact on consumers is unclear because the licensing fee that major oil companies must pay Unocal for 20 years will be the subject of negotiations.

Unocal engineers devised a blending formula in the early 1990s that made for cleaner-burning fuel. At the same time, state regulators were working on a plan to require the use of a cleaner fuel. Before the final rules were issued, Unocal obtained a patent for its formula, which met the new standards. In 1995, the oil giants discovered that their refineries had little choice but to use a fuel formula that was owned by another company.

Unocal sued its competitors for infringing on its patent and won before a jury in Los Angeles in 1997. Experts at the trial testified that the blending formula was worth 5.75 cents per gallon of gasoline. For just a five-month period in 1996, a federal judge calculated, Unocal was owed $69 million in royalties.

Ever since, the major oil companies have been contesting the patent. They were joined last year by California Atty. Gen. Bill Lockyer and his counterparts from 33 states. They said Unocal hijacked the regulatory process by patenting a regulatory requirement.

But the Supreme Court turned away the final appeals from Atlantic Richfield Co., Chevron USA, Exxon Mobil Corp., Shell Oil Products Co. and Texaco Refining Inc. The case goes back to a federal judge in Los Angeles to decide how much money is owed to Unocal.