Patents: Intellectual Property on Trial

US Banker, August, 2008 by Glen Fest

Chrysler’s “Let’s Refuel America” sales incentive sounds like a gas giveaway that puts the car maker on the hook for skyrocketing gas prices—but look again.

Chrysler is betting that by guaranteeing gas for $2.99 a gallon, it’ll sell more vehicles and avoid point-of-sale discounts, but this sales strategy is only possible because the company can, through a specific layering of futures and options contracts, protect itself against escalating fuel prices.

The consumer incentive relies, at heart, on a commodity hedging strategy. And a patented one at that: the fuel incentive program is licensed from Goldman Sachs, one of more than 40 patents held by the New York investment bank. “Let’s Refuel” may be an unusual way to goose auto sales, but the kind of patent it...

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