#United States #Sacramento #Trade Secrets #Phillips 66 #Propel Fuels

Propel Fuels' Landmark Victory in Trade Secret Case

In a historic legal battle that marks a significant moment in intellectual property protection, Propel Fuels, Inc. has emerged victorious with a staggering $833 million judgment against Phillips 66. This decision, delivered by Judge Michael Markman of the Superior Court of California, not only highlights the serious implications of trade secret misappropriation but also sends a powerful message about ethical business practices in the renewable energy sector.

Case Background

The conflict between Propel Fuels and Phillips 66 began amidst discussions of a potential acquisition. In 2018, Phillips 66 was poised to purchase Propel but abruptly canceled the deal. Shortly after terminating the agreement, Phillips 66 launched its own renewable fuel retail enterprise, allegedly leveraging confidential information obtained during the due diligence phase of the acquisition. Propel accused the oil giant of infringing upon its trade secrets, leading to a high-stakes court trial.

The jury trial, which took place in 2024, ended in Propel being awarded approximately $604.9 million in compensatory damages. This amount was later supplemented with an additional $195 million in exemplary damages in July 2025, a decision that Judge Markman justified by labeling Phillips 66's conduct as 'reprehensible' in a business context.

Court Proceedings and Findings

Judge Markman authored a detailed 52-page order, illuminating the egregious nature of Phillips 66’s actions throughout the acquisition process. He noted that before officially informing Propel of the acquisition's collapse, Phillips 66 had already prepared to compete against its former prospective partner. The judge pointed out, “For weeks, Phillips 66 continued to utilize Propel’s team to churn out reports and data that would be instrumental in its subsequent business endeavors.” This premeditated strategy was criticized for undermining the ethics expected in corporate negotiations.

The judge also highlighted troubling aspects of Phillips 66’s management during the due diligence phase, indicating that crucial decisions were made without the appropriate transparency or integrity. Evidence presented included testimony from a Phillips 66 executive directly involved in the investigation, who confessed that confidential Propel information was utilized to evaluate funding options for the competitor project.

Consequences of the Ruling

As the dust settles on this landmark case, the court's ruling confirms Propel's allegations, reinforcing the significant value of intellectual property in the business arena. Propel's motion for attorney fees and additional legal costs is pending consideration, further complicating the financial implications for Phillips 66.

Meanwhile, Phillips 66 has indicated it plans to appeal the decision. Legal experts note that during the appeal, interest on the outstanding judgment will accumulate at a staggering rate of 10% per annum. This translates to an increase of over $83.3 million per year, an additional financial burden on the company during the lengthy appeals process.

Looking Forward

The outcome of this case is pivotal not just for Propel Fuels but also for the renewable energy landscape as a whole. It serves as a reminder of the critical importance of protecting trade secrets, particularly in fast-evolving sectors like renewable fuels. The ruling may inspire other companies to take legal action against trade secret infringements, promoting better practices and accountability in corporate behavior.

As these proceedings draw to a conclusion in the lower courts, the implications of this case will undoubtedly resonate throughout the industry, shaping the future of business operations and competitive strategies in the renewable energy market.