27 January 2000

An arbitrator found in favor of Reno, NV-based A-55 Inc., which charged Caterpillar Inc. with “fraudulently and deceitfully” filing 18 patents and patent applications belonging to A-55, a developer of diesel fuel-water emulsion fuels. The ruling was announced by the arbitrator Edward J. Costello, Jr. on 13 January 2000 in Denver, CO.

Caterpillar was also deemed to wrongfully seek to exploit commercially the misappropriated technology with Lubrizol Corporation, in connection with the development and marketing of its aqueous fuel, PuriNOx. The arbitrator ordered Caterpillar to return to A-55 all intellectual property and any profits derived from the technology.

A-55, Inc. has been developing A-55 Fuels, which are emulsions of water and petroleum used as replacements for traditional petroleum fuels to lower oxides of nitrogen (NOx) and other emissions from power plants and diesel engines. The water and petroleum are bound together by the proprietary A-55 Additive.

In 1994, a joint venture, known as Advanced Fuels, was formed between A-55 and Caterpillar to commercialize fuel emulsions for heavy-duty diesel engines. Advanced Fuels was dissolved in October 1996 and A-55, Inc. acquired the rights to Advanced Fuels and its technology. Caterpillar was to remain as a licensee of the A-55 technology for use of the technology in its own engines. Testimony during the 16-day hearing in Denver late last year revealed that just prior to the dissolution of Advanced Fuels, Caterpillar filed patents and patent applications with the US Patent Office relating to the aqueous fuel technology.

In August 1999, Caterpillar announced that it was joining with Lubrizol to develop and begin market evaluation of a low-emission diesel-water fuel blend called PuriNOx.

The arbitrator ordered Caterpillar to assign all of its interests in the aqueous fuel technology to A-55.

Caterpillar has not yet revealed its next steps in response to the ruling. Lubrizol Corporation stated that its PuriNOx technology was not based on the disputed patents.

Source: A-55