Lubrizol Corp. v. Exxon Corp.

696 F. Supp. 302, 7 U.S.P.Q. 2d (BNA) 1513, 1988 U.S. Dist. LEXIS 12274, 1988 WL 93717
CourtDistrict Court, N.D. Ohio
DecidedJune 17, 1988
DocketC84-1064
StatusPublished
Cited by6 cases

This text of 696 F. Supp. 302 (Lubrizol Corp. v. Exxon Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lubrizol Corp. v. Exxon Corp., 696 F. Supp. 302, 7 U.S.P.Q. 2d (BNA) 1513, 1988 U.S. Dist. LEXIS 12274, 1988 WL 93717 (N.D. Ohio 1988).

Opinion

MEMORANDUM OF DECISION

BATCHELDER, District Judge.

On March 30, 1984, plaintiff the Lubrizol Corporation (“Lubrizol”) commenced this action against defendant Exxon Corporation (“Exxon”) alleging that certain products manufactured by Exxon infringe a number of Lubrizol patents, including U.S. Patent 4,234,435 (the “435 Patent”). On April 25, 1988, Lubrizol filed a motion seeking a preliminary injunction to enjoin Exxon from selling any lubricating composition or additive which contains an Exxon product known as ECA 10444 which Lubrizol claims to infringe the ’435 Patent.

I. FINDINGS OF FACT

BACKGROUND

Lubrizol is an Ohio corporation with its principal place of business in Wickliffe, Ohio. Exxon is a Delaware corporation with its principal place of business in New York, New York. The lubricating oil additive products at issue in this case are manufactured by the Paramins Division of Exxon Chemical Corporation, a division of Exxon Corporation. Exxon Company U.S.A., also a division of Exxon, sells finished lubricants which contain the additive products manufactured by the Paramins Division.

Lubrizol and Exxon are competitors in the sale of lubricating oil additive products. These additive products are sold to customers who blend them into their basestock *306 oils to make finished lubricating oils. Lu-brizol, unlike many of its competitors, including Paramins, is not affiliated with an oil company. Rather, Lubrizol purchases petroleum-related raw materials from oil companies to use in manufacturing its lubricating oil additives.

Lubricating oil additives are products which provide the necessary lubricating function in motor oils. Lubrizol and Exxon not only compete with one another in the manufacture and sale of such lubricating oil additives but are the two largest companies involved in the lubricating oil additive industry.

Lubricants marketed in the United States bear designations signifying qualification under standards promulgated by the American Petroleum Institute (“API”). On March 4, 1988, the API promulgated new standards for motor oils: “SG” for passenger car motor oils and “CE” for diesel motor oils.

Lubricating oil additive customers normally are reluctant to change from one lubricating oil additive supplier to another in the absence of a change in API standards, such as the newly announced SG and CE standards. A change from one supplier to another may require that the customer clean its storage tanks, design new formulation sheets, and install new or different metering devices. As a result, the market share of each lubricating oil additive supplier tends to stay relatively static between changes in API standards.

The specifications announced by the automobile manufacturers state that either the SG or the old SF standard oil may be used in the 1989 model year automobiles which will be released later this year. However, all 1990 model year automobiles must use the new SG standard oil. To remain competitive, all lubricating oil suppliers must reformulate their oils to meet the new SG and CE standards within the next four to six months. Currently, existing purchaser-supplier relationships have been and are likely to be severed as each oil company attempts to meet the new SG standard with the lowest possible formulation cost and the best performance package. As a result, the entire market for lubricating oil additives is in a great state of flux. The supplier that can meet the new standards at the lowest cost will have a significant advantage in the competition to retain and/or increase market share.

Additives incorporated in a finished lubricant include detergent inhibitor (“DI”) packages and, where a multigrade lubricant is involved, viscosity index (“VI”) im-provers, also called viscosity modifiers (“VM”). A typical DI package will usually contain a dispersant, a detergent, an oxidation inhibitor and various other components such as an anti-wear component, all of which aid in either preventing or controlling the formation of undesirable products in the engine due to the internal combustion process. A dispersant helps keep the engine clean by keeping dirt and other particles in suspension in the motor oil to prevent their being deposited and baked on piston walls as “varnish,” or on internal engine surfaces as “sludge.” A viscosity modifier helps to increase the viscosity of the lubricant in hot weather or at high operating temperatures while lowering the viscosity in cold weather and prior to engine warm-up.

Lubricant sellers place these additives in lubricating oils based on “treat rate,” which is the amount of the particular additive necessary to reach the desired result. In the instant case, meeting the SG standard is the desired result. “Treat cost” is the amount of additive needed to reach the desired result multiplied by the cost of such additive. “Total formulated cost” is the sum of the individual costs of each of the components of that particular finished lubricant.

THE ’435 PATENT

The subject of this preliminary injunction hearing is the United States Letters Patent No. 4,234,435, (the “435 Patent”) issued on November 18, 1980, to Norman A. Mein-hardt and Kirk E. Davis and assigned to The Lubrizol Corporation. The title of the invention set forth therein is “Novel Car-boxylic Acid Acylating Agents,-Derivatives Thereof, Concentrate and Lubricant Com *307 positions Containing the Same and Processes for Their Preparation.”

In general terms, the ’435 Patent claims lubricating compositions containing disper-sants derived from high molecular weight hydrocarbons. The dispersants are useful per se as lubricant additives; they also may be subjected to post-treatment with other compounds or compositions to produce other derivatives which are useful as lubricating additives. Further, the ’435 Patent discloses that these dispersants must contain three key parameters which define the invention. First, the starting polyisobutylene (a species of polyalkene) must have a number average molecular weight (“Mn”) of from 1300 to about 5000. Second, the starting polyisobutylene must have a distribution of molecules such that the ratio of weight average molecular weight (“Mw”) to number average molecular weight (“Mw/M„”) of such molecules is in the range of about 1.5 to about 4.

The third key parameter relates to the product obtained when the starting polyiso-butylene is reacted with maleic anhydride, another starting material, to produce a substituted succinic acylating agent which Exxon refers to as “PIBSA”, and Lubrizol refers to as “Pbu Succan.” This substituted succinic acylating agent contains the reacted polyisobutylene, now a polyisobute-nyl substituent group, and the reacted ma-leic anhydride, which the ’435 Patent refers to as a “succinic group.” The reaction process is referred to as “succination” because it results in the formation of succinic groups which bond to the starting polyiso-butylene. The completed reaction yields a product with three basis components: 1) unreaeted polyisobutylene; 2) unreacted maleic anhydride; and 3) starting polyiso-butylene which has bonded with one or more succinic groups (“PIB(SA)n” or “Pbu(Succan)n”, where “n” represents the number of succinic groups which have bonded with a starting polyisobutylene.)

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696 F. Supp. 302, 7 U.S.P.Q. 2d (BNA) 1513, 1988 U.S. Dist. LEXIS 12274, 1988 WL 93717, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lubrizol-corp-v-exxon-corp-ohnd-1988.