US-based energy company Phillips 66 has been ordered by a jury to pay damages totalling $604.9m to Propel Fuels in a trade secrets misappropriation case.
Propel Fuels, a low-carbon fuel retailer at stations throughout California, sued Phillips 66 in 2022 alleging that the latter stole confidential data, proprietary strategies and business intelligence developed by the company.
Notably, the two companies entered due diligence in 2017 related to the proposed takeover of Propel by Phillips 66. During the process, Propel disclosed its proprietary strategies and data related to renewable fuels business to Phillips 66, under a non-disclosure agreement.
Founded in 2004, Propel sells low-carbon renewable fuels, including cleaner energy solution E85 for Flex Fuel vehicles.
The company claimed that Phillips 66 abruptly ended the proposed acquisition deal in August 2018 and subsequently announced its entry into the E85 market in California. It alleged that Phillips 66 entered the market leveraging Propel’s data and market insights.
The jury at the Superior Court of California, County of Alameda, agreed with Propel and said that Phillips 66’s California renewable fuels business was developed from Propel’s trade secrets in violation of the Uniform Trade Secrets Act.
It also concluded that Phillips 66’s misappropriation was wilful and malicious, which means the Court may triple the total damages award.
The jury decision comes after more than two years of pretrial proceedings and a trial that included evidence and testimony from 31 witnesses, including ten expert witnesses.
Propel Fuels founder and CEO Rob Elam said: “Propel Fuels is pleased that after viewing all of the evidence, the jury held Phillips 66 accountable for stealing our trade secrets.
“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.”
A spokesperson for Phillips 66 told Reuters that the company was disappointed with the ruling and it will assess all legal options moving forward.
