#United States #Sacramento #Legal Victory #Phillips 66 #Propel Fuels

Propel Fuels Secures $195 Million in Trade Secret Case Against Phillips 66

In a landmark litigation, California-based renewable fuels company Propel Fuels, Inc. has won an additional $195 million in exemplary damages for trade secret misappropriation against Phillips 66. This judgment raises the total amount awarded to Propel to more than $833 million, marking it as one of the five largest trade secret judgments in U.S. history.

The ruling, issued by Judge Michael Markman of the Alameda County Superior Court, came after a five-week trial that concluded in October 2024. The jury found Phillips 66's actions to be willful and malicious, leading to significant compensatory damages and pre-judgment interest having already been awarded. The company now stands to recover further legal fees as the case progresses.

A Seven-Year Battle for Justice
Rob Elam, Propel’s founder and CEO, stated that the choice to engage in this legal battle was not taken lightly, revealing the complexities and challenges faced over the seven years leading to this verdict. "This has been a long and challenging journey, not just for Propel, but for everyone involved—our employees, shareholders, and partners. We fought not only for ourselves but also for small businesses across America, underscoring the importance of defending innovation and accountability in corporate practices."

The dispute traces back to 2018 when Phillips 66 attempted to acquire Propel but later terminated the agreement. Propel accused Phillips of misusing confidential information gained during the acquisition process to launch its own renewable fuel business. The Court emphasized that the financial and competitive advantage Phillips leveraged from Propel’s trade secrets was stark and unacceptable, and highlighted the need for better corporate practices post-merger considerations, including handling confidential data responsibly.

Reprehensible Conduct
Judge Markman described Phillips 66's misconduct as 'reprehensible' from a business viewpoint, citing various failures during their due diligence process. According to the court's findings, Phillips 66 not only neglected to execute adequate measures to secure Propel’s sensitive information but continued to mislead Propel about the status of their merger deal, even after deciding internally to abandon it.

Internal communications revealed how Phillips 66’s management was aware of their obligations to return or safeguard the trade secrets but chose to disregard them. The ruling noted, "Phillips 66 knew it could have employed preventive measures such as utilizing a clean team to prevent the misappropriation of Propel's intellectual property—standard practice in the corporate world."

Impact on Corporate Ethics
Michael Ng, leading attorney for Propel from the global disputes firm Kobre & Kim, echoed Elam's sentiments on the importance of this case. He expressed gratitude for the Court’s detailed examination of the evidence presented and emphasized that the findings serve as critical lessons about corporate accountability. The public nature of these proceedings is expected to foster a dialogue on ethical corporate behavior and the repercussions of misconduct in business practices.

As the case continues, notable attention will now turn towards the discussions surrounding the corporate culture at Phillips 66 and the broader industry. The court's ruling serves as a stark reminder to corporations—large and small—that innovation must be protected and ethical practices upheld in all business endeavors.

A formal conference about the entry of judgment is set for August 5, 2025, marking another pivotal moment in this significant legal proceeding. Propel aims to not only resolve its concerns against Phillips 66 but also to create a lasting impact that brings awareness to trade secret enforcement and corporate ethics in the United States.

This case stands as a testament to the struggle between innovation-driven startups and established enterprises, igniting essential conversations about fairness, responsibility, and accountability in business.