An arbitrator accused Caterpillar Inc. of fraud by improperly patenting and marketing diesel engine clean fuel technology that belonged to a former joint venture partner.

According to the Wall Street Journal, Caterpillar formed Advanced Fuels LLC with Reno, NV-based A-55 Inc. in 1994. The venture was set up to commercialize so-called aqueous fuel technology. Advanced Fuels was dissolved in 1996.
In the past few years Caterpillar has obtained six patents related to the technology and another 12 are pending. A-55 contends that some of those applications were filed before the breakup of the joint venture and that it owns the technology.
Arbitrator Edward Costello Jr. sided with A-55 and accused Caterpillar of concealing its "misappropriation" of the technology. He said a new joint venture with Lubrizol, now working on a fuel blend called PuriNox, is pursuing technology rightfully owned by A-55. While Costello didn't spell out specific damages, he did call on Caterpillar to turn over its patent files to A-55, stop selling or using the technology, and account for all profits obtained from the use of the disputed technology. Caterpillar can challenge the arbitrator's opinion.