Oakland, Calif. – In a landmark decision, Propel Fuels, Inc., a prominent California-based retailer specializing in low-carbon fuels, triumphed in a significant legal battle against Phillips 66 Company. A jury awarded Propel nearly $605 million after determining that Phillips 66 developed its renewable fuels sector by unlawfully using Propel’s confidential business insights. The decision came after a rigorous five-week trial in the Superior Court of California in Alameda County.
The lawsuit, originally filed by Propel on February 16, 2022, claimed that Phillips 66 had misappropriated trade secrets that Propel had cultivated over 13 years of operations. The case underscored intense courtroom debates, extensive evidence, and testimonies from 31 witnesses, including 10 experts. Jurors concluded that Phillips 66’s actions were not only wrongful but carried out in a willful and malicious manner, a finding that may prompt the tripling of the damages awarded to Propel.
Rob Elam, the CEO and founder of Propel, responded to the verdict with approval, highlighting the company’s role in pioneering the market for renewable fuels, such as E85 and high-blend renewable diesel sold under its HPR brand. Elam emphasized that Phillips 66 had benefited from years of entrepreneurial risk and investment by Propel.
According to Michael Ng from Kobre & Kim, the law firm representing Propel, this case was a testament to the resolve of small innovators confronting larger, well-established companies. Ng praised the jury for their diligence and the presiding judge for his fairness throughout the trial process.
The origins of the dispute trace back to 2017 when both companies engaged in possible acquisition talks. During this period of due diligence under a non-disclosure agreement, Propel shared vital proprietary strategies and data with Phillips 66. However, after the deal fell through in August 2018, Phillips 66 quickly entered the renewable fuels market, which Propel argued was done by exploiting the knowledge gained from their disclosures.
As of now, Phillips 66 has expanded its presence significantly, offering E85 and renewable diesel across more than 600 stations in California. These developments arose shortly after the company had abruptly ended negotiations with Propel, fueling the latter’s claims of trade secret theft.
Propel Fuels has been a pioneering entity since its inception in 2004, spearheading the introduction and sale of lower-emission fuel alternatives in the California market. Their product offerings include American-made Flex Fuel E85 and Diesel HPR, which are designed to perform better and emit fewer carbon emissions compared to traditional fuels.
This lawsuit and its outcome not only reflect ongoing tensions within the renewable energy sector but also underscore the critical importance of intellectual property rights and fair competitive practices in fostering industry innovation and environmental sustainability.
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