There have been numerous mentions here, and elsewhere, over the years of Mobil v Castrol and an epic battle over the use of the term synthetic. It is often referred to as a "court case".
It took a while but I was finally able to dig it up, I have not seen it anywhere else on the internet so I've posted it here in it's entirety.
It's a fascinating document, I think all here will agree that "Synthetic" means "Synthetic", but it’s still a a very good informative read. It can almost stand alone as the basis of an FAQ introduction to synthetic oil itself.
It took a while but I was finally able to dig it up, I have not seen it anywhere else on the internet so I've posted it here in it's entirety.
It's a fascinating document, I think all here will agree that "Synthetic" means "Synthetic", but it’s still a a very good informative read. It can almost stand alone as the basis of an FAQ introduction to synthetic oil itself.
The Council of Better Business Bureaus, National Advertising Review Council, National Advertising Division
Case #3526 (03/01/99)
Castrol Syntec Synthetic Motor Oil
Hampel Stefanides/ New York, NY
• When the use of a term commonly used by a particular industry is challenged, NAD will look to industry practice, the opinion of experts, and the use of the term in the current marketplace and will not restrict use of that term to a narrower definition offered by any one party.
• A finding by NAD, in a previous case, that a product was superior to competitive products, is insufficient to support a current claim that a new, completely different formulation of that product is also superior.
BASIS OF INQUIRY
Advertising by Castrol, Inc. (“Castrol”) for Castrol Syntec, a synthetic motor oil, including broadcast commercials, website advertising, package labeling and point-of-sale advertising brochures, was challenged by the Mobil Oil Corporation (“Mobil”), manufacturer of Mobil 1, a competitive synthetic motor oil. Television Commercials: A 1997 television commercial, entitled, Test 4E: Test on Race Track, depicts the oil being drained from a car and then replaced with only a capful of Castrol Syntec. The car is then shown running at 102 miles per hour for an extended period of time. As the announcer states: “Syntec has unique molecular structure that bonds to engine parts,” the words “CASTROL SYNTEC’S UNIQUE MOLECULAR STRUCTURE” appear over the entire screen. The announcer continues: “Castrol Syntec protects in ways other oils can’t.” Three 1998 television commercials were also challenged. In one of these commercials, entitled Aerial Dogfight, a fighter jet is depicted sighting and then accurately hitting a target with a missile. An announcer then states: “This kind of performance is now available in a motor oil. Castrol Syntec’s patented stabilizers seek out and neutralize harmful particles, protecting in ways that other oils can’t. Castrol Syntec. The active lubricant.” The last frames of the commercial picture a container of Syntec with the words “Castrol Syntec’s patented stabilizers seek out and neutralize harmful particles” superimposed in large letters over the entire screen. Another 1998 commercial, entitled Spiderman, equates Syntec with the comic book character and features Spiderman destroying the “Bad Guy, ” who appears as a stand-in for “a harmful particle in your engine.” After depicting Spiderman destroying the “Bad Guy,” the announcer states: “You see Syntec’s patented stabilizers seek out and neutralize harmful particles protecting in ways that other oils can’t. Castrol Syntec. The active lubricant.” The final frames of the commercial are the same as those in Aerial Dogfight. Similarly, in a third 1998 commercial, entitled Air Force, an announcer compares one fighter jet labeled “Syntec” to another jet labeled “harmful particle.” After turbine and electronic sounds are heard, and an explosion is seen and heard, the announcer states: “Get the point? You see Syntec’s patented stabilizers seek out and neutralize harmful particles protecting in ways that other oils can’t. Castrol Syntec. The active lubricant.” The final frames of the commercial are the same as those in Aerial Dogfight. Web Site: A page of Castrol’s web site states: “
ynthetic lubricants are manufactured chemicals … created in the laboratory by combining molecules.” Labeling: A 1998 Syntec package label reads as follows: “UNIQUE MOLECULAR BONDING. Castrol Syntec FULL SYNTHETIC. PROTECTS IN WAYS OTHER OILS CAN’T. SAE 10W-30. FULL SYNTHETIC MOTOR OIL.” Brochures: A 1997 brochure, entitled “Best Protection Available,” contains the following claims: “The synthetic base stock contains exclusive chemical esters that actually bond to engine surfaces, leaving a layer of protection far stronger than conventional and synthetic blend motor oils.” “The Best Protection Available. Together, the bonding and additive technology provide the best protection you can buy.” “Nothing protects better than Castrol SYNTEC FULL SYNTHETIC.” Another 1997 brochure entitled “Engine Wear. How Well Does Your Motor Oil Prevent It?” contains the following claims: “Unique molecular bonding. Castrol Syntec Full Synthetic.” “…synthetic oils can protect your engine in ways conventional oils never could.” “Castrol Syntec protects in ways other oils can’t.” “Castrol Syntec is a breakthrough in lubrication technology. Its full synthetic formula (FSX) and exclusive chemistry provide protection and performance that far surpass conventional oil.” “Castrol Syntec’s synthetic base stock contains an exclusive chemical ester that actually bonds to engine surfaces providing a layer of added protection. “Layer of protection far stronger than conventional oils.” A 1998 brochure, “The Best Protection Available,” states: “The unique active formula of Syntec is engineered with Patented Stabilizers that aggressively seek out and neutralize harmful corrosive particles suspending them away from engine parts.” “SYNTEC has exclusive base stocks that actually bond to engine surfaces leaving a layer of protection far stronger than conventional oils.” “When you use Syntec you are helping extend engine life by reducing wear and keeping your engine clean. Do not settle for second best! Use Castrol SYNTEC Full Synthetic Motor Oil.”
CHALLENGER’S POSITION Mobil contended that Castrol misleads consumers because it continues to market Syntec as Full Synthetic Motor Oil, despite the fact that Syntec is no longer synthetic.1 The challenger alleged that in approximately December 1997, after years of manufacturing Syntec with polyalphaolefin (“PAO”), a synthetic base oil, Castrol stopped using PAO, which had constituted almost 70% of the volume of the product, and substituted hydropro-cessed mineral oil,2 a natural base oil, thereby degrading Syntec. Mobil maintained that samples of Syntec purchased in June and December 1997 contained 93% and 80% PAO, respectively, whereas other samples o Syntec, one purchased in December 1997 and four purchased in 1998, contained no PAO, and instead contained 100% mineral oil.3 The challenger asserted that by failing to inform consumers of the change, keeping the name “Syntec” and the descriptor “Full Synthetic Motor Oil,” and not reducing the price of Syntec, Castrol deceives consumers about the true nature of its product. In addition, Mobil maintained that Syntec, in its current formulation, does not provide the attributes of true synthetic motor oils and its efficacy and superior performance claims are thus inaccurate. I. Definition of Synthetic: The challenger relied on the opinion of two experts, Professor J.M. Perez, a lubrication and technology expert from Pennsylvania State University, and Professor O.L. Chapman, an expert in synthetic chemistry from the University of California, Los Angeles, for its assertion that because Syntec is made of hydroprocessed mineral oil, it cannot be synthetic. According to Professors Perez and Chapman, hydroprocessed mineral oil is merely refined, but not synthetic, mineral oil, whereas true synthetics require “the formation of chemical products from simple well defined molecules by synthesis or chemical reaction.”4 These experts stated that synthetic oil is derived by a chemical reaction which combines uniquely defined small molecules to make larger complex molecules, whereas taking one complex mixture of molecules and processing them into another complex mixture, as is done in the production of hydroprocessed mineral oil, does not produce a synthetic product.5 Dr. Chapman asserted that synthetic materials are constructed from pure compounds that are themselves not natural, and the resulting synthetic material has well-defined properties. He cited the synthetic fiber Dacron as an example and stated that it is built from pure small molecules that have already been subject to a chemical reaction, and is not made from natural fibers.6 Mobil contended that, like Dacron, PAO and ester are built from pure small molecules that have already been subject to a chemical reaction, and are not built from natural petroleum. Mobil argued that natural material cannot be processed into synthetic material, and that no amount of processing can convert a natural material into a synthetic one. According to Mobil, Castrol’s new base stock (Shell’s hydroisomerized base stock), because it begins with a natural material (petroleum or petroleum wax), can never be made into a synthetic material.7 While Mobil conceded that Shell’s hydroisomerized base stock can be produced from one type of wax that is synthetic (the product of Fischer-Tropsch synthesis), Mobil maintained that this type of wax is not used to produce the hydroisomerized base stock contained in Syntec. According to Mobil, the wax from which the base stock used in Syntec is produced, is “slack wax,” which is a by-product from the manufacture of parafinic base oils, a natural product.8 Criticism of Castrol’s Definition of Synthetic: Mobil asserted that the definition of “synthetic” propounded by Castrol is contrary to the definition of synthetic used by other motor oil manufacturers and the Environmental Protection Agency (“EPA”)9. The challenger noted for example, that Exxon, on its web site, states that a synthetic lubricant is a “lubricating fluid made by chemically reacting materials of a specific chemical composition to produce a compound with planned and predictable properties…” and that similarly, Chevron, Lubrizol, Mobil, Valvoline and Quaker State all disseminate definitions of synthetic that do not include hydroisomerized oil. Further, the challenger noted that the advertiser does not even meet the definition of “synthetic oil” that Castrol disseminates on its own web site to consumers, i.e., “
ynthetic lubricants are manufactured chemicals … created in the laboratory by combining molecules” and “a lubricant produced by synthesis rather than by extraction and refinement.” The challenger maintained that, in fact, Syntec meets Castrol’s definition (provided on its web site) of mineral oil — oil that is “manufactured from crude oil by a series of refinery processes.” In addition, Mobil contended that Castrol, in a suit filed in Germany in 1988, argued that hydroprocessed mineral oil is not synthetic oil. In that suit, in which Castrol ultimately prevailed, Castrol argued that: hydroprocessed mineral oil is not synthetic; hydroprocessed mineral oil does not protect engines as well as synthetic oil; and, labeling such oil as synthetic is deceptive. According to Mobil, Castrol’s expert, Dr. Hoffmann, who stated that synthetic material is, “a substance, pure or a mixture, that has undergone at least one major chemical transformation (reaction) in its manufacture or processing….A synthetic material is the product of an intended chemical reaction” (Castrol Response, July 8, 1998, at p. 14), confuses the definition of synthesis with the definition of chemistry. Mobil noted that Dr. Hoffmann is a “theoretical” chemist and that his definition of “synthetic” is much too broad, and would render all cooked foods, as well as beer and dough “synthetic.” Mobil maintained that a material is either natural in origin or synthetic in origin, and that processing natural materials will not make them synthetic. Deceptive Product Name: The challenger contended that by linking the name Castrol Syntec with synthetic motor oil since 1991, Castrol, through its television commercials, brochures, labels and web site, has created an automatic association for consumers that any Syntec product is a synthetic oil, and that Syntec and synthetic oil are one and the same.10 Mobil further contended that although the label on the containers of Syntec currently on store shelves is the same label that has been in use for several years, two new (April 1998) television commercials (“Dog Fight” and “Spiderman”) show a mock-up of a quart of Syntec bearing a new label. This label, according to Mobil, does not contain the claim that Syntec is a full synthetic motor oil, but claims instead that Syntec is the “active lubricant” that has “patented stabilizers that seek out and neutralize harmful particles.”11 According to the challenger, in a survey conducted for Mobil to gauge consumer reaction to the Dog Fight commercial, 75% of those surveyed responded that they believed that Syntec protects engines as well as or better than “the best selling brand of fully synthetic motor oil.” Response to Castrol’s Assertions Regarding SAE’s Change in Definition: Mobil asserted that Castrol’s representation, that the Society of Automotive Engineers (“SAE”)12 recognized that hydroisomerized oil is synthetic, is false. First, the challenger noted that SAE’s legal Administrator, Steven P. Daum, has stated: “SAE has neither issued an official definition of, nor adopted a Society position on, what does or does not constitute such material. SAE does not render opinions on what products may be marketed or advertised as synthetic motor oil.” According to Mobil, SAE does not set or establish marketing guidelines, but is, instead, mandated to advance the arts, sciences, standards, and engineering practices connected with the development, design, construction and use of self-propelled machines…” Second, Mobil contended that Castrol’s assertion, that Section J357 of SAE’s “Physical and Chemical Properties of Engine Oils,” which describes the base stocks used in the manufacture of motor oils, expresses SAE’s recognition that Shell’s hydroisomerized base stocks may be marketed as synthetic, is wrong because SAE J357 is nothing more than a general guide to engine oil properties. The challenger noted that the current version of SAE J357 does not define or even use the word synthetic, and does not characterize any base stock as synthetic. Finally, Mobil asserted that Castrol mischaracterized the debate that led to the current version of SAE J357.13 In fact, Mobil contended, while SAE had been specifically asked by Shell to include Shell’s hydroisomerized base stocks as an example of synthetic base stocks, SAE expressly rejected this proposal. Mobil further noted that it was Castrol that first proposed the definition (specifically stating that Shell’s hydroisomerized base stocks were not synthetic) to SAE, and that Mobil followed Castrol’s lead in arguing for this restrictive definition of synthetic. According to the challenger, at the last moment, in response to a request from Shell, SAE agreed to merely describe the types of base oils used for blending lubricants without reference to the word “synthetic,” thus taking no position on the definition of that term. Response to Castrol’s Assertions Regarding the Automotive Lubricants Reference Book: Mobil asserted that despite Castrol’s repeated references to SAE’s Automotive Lubricants Reference Book as support for its assertion that SAE condones the marketing of hydroisomerized oil as synthetic, the book is not an official SAE publication, and the views expressed in the book are not those of SAE, but merely those of the authors.14 II. Superiority and Other Claims: Mobil maintained that by representing in its advertisements that Syntec “protects in ways that other oils can’t,” is a “full synthetic motor oil,” and provides “unique molecular bonding,” Castrol made broad superiority claims against all conventional and synthetic motor oils. The challenger asserted that Castrol based these claims on its prior formulation, which contained 70% PAO and approximately 7% ester,15 whereas the current Syntec contains no PAO and either no, or only trace amounts of, ester.16 With regard to esters, Mobil asserted that even if Syntec now contains a small amount of ester, Castrol has not demonstrated that there is anything “unique” about it. The challenger argued that at least four brands17 of synthetic motor oil contain esters (to confer bonding capabilities), and therefore, Syntec’s bonding is not unique. The challenger noted that Castrol has not told consumers how Syntec “protects in ways other oils can’t,” and asserted that to the extent that Castrol seeks to base this claim on its express claim that Syntec’s “patented stabilizers seek out and neutralize harmful particles,” the attempt fails. According to the challenger, virtually all motor oils contain additives that act as stabilizers and neutralize harmful particles, and therefore, Syntec is no better than other motor oils, such as Mobil 1. Mobil contended that Castrol, having failed to submit testing against a range of both conventional and synthetic motor oils, has presented no substantiation for this claim. Mobil alleged that not only does Syntec not perform better than other motor oils, but, in fact, when tested in a Cold Flow Demonstration test (which shows the lowest temperature at which an oil will readily pour), five motor oils flowed better in extremely cold temperatures than Syntec. The challenger asserted that this test proves that Castrol’s superiority claims are unsubstantiated. Further, with respect to claims that “Nothing protects better than Castrol Syntec Full Synthetic,” and “Together, the bonding and additive technology [in Syntec] provide the best protection you can buy,” the challenger asserted that Castrol presented no substantiation that Syntec offers better protection than other motor oils. Mobil asserted that these claims, in the context of Castrol’s television commercials, labeling, brochures and on its website, are not accurate with respect to the current formulation of Syntec. Mobil maintained that it is irrefutable in the oil industry that synthetic oil provides better engine protection than mineral oil, and that reformulated Syntec no longer provides a basis for these superiority claims, rendering them false and deceptive. In support of this assertion, Mobil cited Dr. Martin Voltz, another Mobil expert, who stated that he believed that Castrol’s practice of changing the formulation of Syntec (substituting Shell’s hydroisomerized base stock for PAO), without informing consumers of the change, is deceptive because PAO provides superior engine protection (for example, when the engine is operating at extremely hot or cold temperatures) to hydroisomerized oil. In addition, the challenger asserted that Castrol’s advertisements contain unsubstantiated implied claims that Syntec contains the same ingredients that it has since Castrol began selling Syntec, and that Syntec contains exclusive esters that provide unique benefits to engines. Response to Castrol’s Wear Test: Mobil contended that Castrol’s Thin Layer Activation (“TLA”) wear test provides no substantiation for the equivalence of hydroisomerized base stock and PAO, or for any of Castrol’s performance claims for Syntec for several reasons: a) The TLA does not approximate “real world” conditions. The challenger stated that, unlike API wear tests, which are conducted using fully operational internal combustion engines run under their own power, an external electric engine drives Castrol’s TLA test rig. Mobil maintained that externally driven test rigs do not replicate the operating temperatures and load dynamics of fired engines. Therefore, according to Mobil, the TLA test results are difficult to correlate to the operations of actual internal combustion engines. The challenger also stated that wear in an engine is affected by many factors other than motor oil including, for example: the metallurgy and surface finishes used on the engines tested (the advertiser did not disclose whether the engines tested were similar to North American engines); the engine loads, of which there was no mention; fuel type and quality, which is important in the degradation of motor oil and can increase the potential on increased wear (not disclosed); oil stability, because oil that breaks down at high temperatures rapidly loses its anti-wear properties, and a motorized rig test like the TLA does not evaluate the effects of oil degradation wear. b) Base stock types have only minimal impact on valve train wear protection. Mobil asserted that performance additives have more of an effect on engine wear than the selection of base stocks and the TLA is incapable of establishing equivalency between base stock types. c) Castrol’s TLA test has not been peer reviewed. Mobil argued that absent industry peer review and acceptance, the test and its results cannot be relied on to any meaningful degree. d) Castrol has not provided correlation data to other established industry tests or to field performance. The challenger maintained that since Castrol provided no data to connect the results of its test to actual performance, the results have no relevance and should not be considered. e) The TLA test data offer no support for the claim that Syntec “Protects in Ways Other Oils Can’t.” Mobil contended that for Castrol to substantiate its superiority claim, it would have to provide comparative data against a wide sampling of competing brands, which Castrol did not do. Mobil also noted that according to the statistical analysis of the TLA Program 11 data, the new Syntec is statistically equivalent to the reference oil used in the test. III. Castrol Degraded Syntec: Mobil contended that Castrol degraded Syntec by substituting hydroprocessed mineral oil for the more expensive PAO, to the detriment of consumers. To support its assertion that the current Syntec has been degraded, Mobil cited the following: a. Cold Cranking Simulator Test. Mobil noted, for example, the inability of the current formulation of Syntec to remain liquid (and, therefore, crank) at extremely low temperatures. According to the challenger, in the American Petroleum Institute (“API”) Cold Cranking Simulator (“CCS”) test comparing the former version of Syntec to the current version, and to Mobil 1 Advanced Formula 10W-30 (“Mobil 1”), the current formulation of Syntec, although it did not fail the test, performed the worst; at -31 degrees Fahrenheit, the current Syntec became too thick to measure, far thicker than the old Syntec or Mobil 1. b. Pour Point Test. The challenger stated that the ASTM D 97 Pour Point Test is a standard industry test used to measure the ability of a motor oil to flow at low temperatures. Mobil asserted that in a Pour point Test comparing the old formulation of Syntec to the new formulation and to Mobil 1, the current Syntec again performed the worst. In addition, Mobil maintained that the current Syntec has a worse pour point than the previous formulation, providing further proof that Castrol degraded Syntec and that it no longer provides the level of protection in extreme cold weather that it had before Castrol changed its formulation. c. Extended Sequence IIIE Test. Mobil maintained that the Extended Sequence III E (“Ext III E”) is a widely used standard test, required by the API, to measure wear, deposit control, and stability of engine oil subjected to high temperatures. The test is measured over a 64 hour period, but the challenger contended that it is often extended to 128 hours to determine oil performance under extreme conditions. Mobil asserted that although both versions of Syntec performed equally well early in the test, after 96 hours, the current version performed much worse than the old version of Syntec.18 The challenger maintained that the results of the Extended Sequence IIIE test demonstrate another way that the change in formulation harms consumers, i.e., through an increased potential for engine damage when operating at extremely hot temperatures, such as those that might be reached while towing or driving over mountainous roads. Mobil posited that consumers could damage their engines by merely operating their cars as they had in the past, while using the new version of Syntec. In response to Castrol’s assertion that Syntec not only still meets industry standards, but, in fact, has increased the number of tests it passes, Mobil pointed out that meeting industry standards only means that minimum standards are met, and in no way proves that the current Syntec is as good as it was in the past when it was made with PAO. Mobil argued that it is therefore deceptive for Castrol to market the current version of Syntec without notifying consumers of the change in formulation.
ADVERTISER’S POSITION Castrol defended its claim that Castrol Syntec is synthetic, explaining that the claim is based on the nature of its Shell’s hydroisomerized base stocks and is substantiated by a wealth of evidence including the opinions of its distinguished experts on chemistry, the statements of experts from Shell and Exxon, the definitions in the “SAE” Automotive Lubricants Reference Book, an academic paper by Dr. Voltz, a Mobil scientist, and the statement of an independent motor oil expert, Richard Kabel. The advertiser contended that, by contrast, Mobil’s position is that of a minority, and is inconsistent with recent technological advances. In addition, the advertiser maintained that Mobil’s assertion that Castrol has degraded Syntec is baseless because Castrol’s data shows that Syntec’s current formulation provides more protection than the old formulation and is, in fact, superior to Mobil 1, Mobil’s synthetic oil. I. Castrol Syntec is Synthetic: Castrol maintained that its synthetic claim for Syntec is amply supported by scientific learning and industry consensus, and that Mobil’s presentation of a minority dissenting view from that learning and consensus is not sufficient to prevent Castrol from marketing Syntec as synthetic.19 The advertiser distinguished “conventional” from “synthetic” oils as follows: conventional oils are taken from the ground, purified and refined, without reforming through chemical reactions, whereas synthetic oils are made with stocks in which the molecular structure of a substance, such as a wax, has been broken apart and transformed through a chemical reaction to create a new molecule that is different from naturally occurring substances. In support of its position, Castrol cited a number of experts, a motor oil industry association and an industry text: Experts: Professor Roald Hoffmann, a Nobel Laureate, and the Frank H.T. Rhodes Professor of Chemistry at Cornell University, defined a synthetic material as “the product of an intended chemical reaction,” and stated that the new formulation for Syntec is synthetic in nature, not natural. According to Professor Hoffmann, a ‘synthetic’ material is a substance that has undergone at least one major chemical transformation (reaction) in its manufacture or processing, but a simple “physical separation, purification or transformation (e.g., freezing or boiling) does not constitute a synthesis.” Sir John Meurig Thomas, of the Royal Institute of Great Britain, reached a similar conclusion to that of Professor Hoffmann, and stated that although there is no net increase in the size of the molecule in hydroisomerization, this does not prevent the process from creating a synthetic substance. He concluded that the act of isomerizing a linear paraffin into a branched-chain paraffin makes the process of producing Shell’s hydroisomerized base stock as much of a synthesis as the build-up of larger hydrocarbons from smaller ones, and stated “I have no doubt that the label “synthetic lubricant” can be firmly attached to those hydrocarbons produced by a process of hydroisomerization.” Mr. J.G. Helpinstill, an Exxon employee responsible for coordinating Exxon’s lubricating base stock and finished product research and development programs, stated that it is appropriate to classify as synthetic materials that are not found in the earth’s naturally occurring resources in commercial quantities, but instead are made by substantive chemical modification of other naturally occurring or physically recoverable, substances. Castrol maintained that Exxon produces a hydroprocessed base stock called Exxsyn, which uses a similar manufacturing process to that used for Shell’s hydroisomerized base stock, and Mr. Helpinstill asserted that Exxsyn, like the Shell product, is a fully synthetic base stock. Peter Wardle, principal technologist in the base oil department of Shell’s central technology organization in the Netherlands, stated that “synthesis” means the construction and/or reconfiguration of molecules. Mr. Wardle noted that a molecule that has been produced by the modification of an existing molecule is just as synthetic as a molecule that has been assembled from a number of smaller molecules, because in each case, one has created something that did not originally exist.20 Professor Bruce Gates, Department of Chemical Engineering and Materials Science, University of California at Davis, stated that based upon his review of Peter Wardle’s description of the hydroisomerization process, he believes that Shell’s hydroisomerized base stock is synthetic because it is the product of intended chemical reactions, consistent with the definition of synthetic given by Professor Roald Hoffmann, and consistent with the usage of the term “synthetic” applied elsewhere in the fuel and petroleum industry, for example, to describe fuels produced by a process called coal liquefaction, which, according to Professor Gates, has strong parallels to the process used in the manufacture of Shell’s hydroisomerized base stock. Professor Gates disagreed with the statements of Mobil’s expert, Dr. Chapman, regarding “synthetic” (i.e., “A material is either natural in origin or synthetic. Synthetic materials are constructed from known pure compounds that have themselves been subject to a chemical reaction…”), and noted that these statements contradict Mobil’s description of PAO as synthetic, because the starting material for PAO is a natural material (crude oil).21 Thus, Professor Gates asserted that Professor Chapman’s statement that “… no amount of processing can convert natural material into synthetic material…”, is incorrect. Gates also noted that while Chapman stated that “cracking is the very antithesis of synthesis,” the cracking process is employed in the production of ethylene from crude oil, which is then used to make PAO. In response to the challenger’s contention that Castrol has previously argued (in the 1988 German case) that hyroprocessed motor oil is not synthetic, the advertiser stated that Castrol Germany made that argument with respect to a different hydrocracked product, and, most important, before the motor oil industry decided not to restrict the definition of synthetics. Castrol contended that the motor oil industry now recognizes that hydroisomerized base stocks are synthetic, and cited the following as examples: SAE and API Decisions: Castrol contended that in 1993, SAE, an industry standard setting body, was asked to amend the definition of “synthetic base stocks” to exclude hydroisomerized products, by defining synthesis as involving the building up of larger molecules from smaller components. According to Castrol, the SAE, after hearing arguments and after extensive debate, decided in 1995, as did API, to revise their guidelines to eliminate any definition of “synthetic.” The advertiser submitted a statement by Dr. Norman Jacobson, a member of the SAE Task Force on J357 from 1988 through 1996, and a former employee of Castrol, describing the process of changing the guidelines. Dr. Jacobson stated that SAE J357, entitled “Physical and Chemical Properties of Engine Oils,” defines the base stocks used in the manufacture of motor oils, and that prior to 1993, it divided base stocks into three categories: Petroleum Base Stocks; Rerefined or Recycled Petroleum Base Stocks; and Synthetic Base Stocks. The definition of “Synthetic Base Stocks” then included the following language: “These are manufactured by organic reactions such as alkylation, esterification, polymerization, etc. Starting materials may be one or more relatively pure organic compounds.” According to Dr. Jacobson, the long-standing debate within the motor oil industry on the proper definition of synthetic became more pronounced in 1993, due in part to advances in the processes used to manufacture Shell’s or other hydroisomerized base stocks. Mobil and Castrol wanted to exclude these base stocks by adding language specifically requiring that the organic reactions “chemically join reactants to build molecular weight and viscosity,” and excluding “simple molecular rearrangements or isomerizations” from the definition of synthetic, whereas Shell, wanting to include its hydroisomerized base stock, submitted a proposal asking that the section describing base stocks be revised to not use the word “synthetic.” Dr. Jacobson stated that the committee ultimately rejected the more restrictive view of Mobil and Castrol and revised J357, effective 1996, to remove all references to the term “synthetic.” Dr. Jacobson further stated that directly after the revision of SAE J357, a proposal was adopted by the American Petroleum Institute (“API”) to revise API 1509,22 known as the Engine Oil Licensing and Certification System (“EOLCS”), to eliminate any reference to the term “synthetic,” and thus conform API 1509 to SAE J357. Castrol argued that Mobil’s challenge before NAD MXC is really an effort to reopen a debate that it previously lost within these industry organizations. Automotive Lubricants Reference Book: Castrol also asserted that SAE’s Automotive Lubricants Reference Book, written at the request of SAE and subjected to extensive peer review, states that base oils made through severe cracking and reforming processes (the processes used for Castrol Syntec), may be marketed as “synthetic”: It is now generally accepted that the term [synthetic] may be used in marketing products which have been formulated to deliver the levels of performance which can be achieved only by the use of judiciously chosen base stocks from a variety of sources, including severe reforming and cracking processes at a petroleum refinery. Castrol maintained that base stocks like Shell’s hydroisomerized base stock are marketed as synthetic throughout the world, in 37 countries, including the United States, and that Mobil’s real interest is in protecting its market dominance (as the leading producer of PAO, a base stock used in many synthetic motor oils, including, significantly, the previous formulation of Syntec) from the competition of other synthetic base stocks. The advertiser contended that Mobil is, in effect, asking NAD to create a monopoly for PAO base stocks in the market for synthetic motor oil. Moreover, the advertiser argued that Mobil itself, through its alliance with B.P., markets hydroisomerized base stocks as synthetic in Europe and elsewhere. All of the above, according to the advertiser, underscores how established and accepted Castrol’s position is in the motor oil industry. Further, Castrol alleged that Mobil’s own expert, Dr. Voltz, has endorsed Castrol’s definition of synthetic motor oils. As support, the advertiser pointed to a 1998 academic paper delivered by Dr. Voltz at a German symposium in which he repeatedly referred to hydroisomerized motor oils as synthetic, and alluded to both PAO and hydrocracked oil as “clearly superior” “synthetic” products. II. Superiority Claims: Castrol maintained that its claims that Syntec provides “unique molecular bonding” and “protects in ways that other oils can’t” are limited to comparisons with conventional oils and are fully substantiated. The advertiser contended that because it was making the same claims that were the subject of a previous NAD MXC challenge in 1993, there is no need to revisit this issue given NAD’s prior determination that all the claims are substantiated. Castrol argued, in particular, that NAD had “already decided” that Castrol’s “unique molecular bonding” and “protects in ways other oils can’t” claims simply reiterate the well-accepted industry proposition that synthetic oils (such as Syntec) have overall superiority to conventional oils. Castrol asserted that its “patented stabilizers” claim also is only a comparison to conventional oils because its current advertising, like the advertisements in the 1993 challenge, is filled with explicit references indicating a comparison to conventional oils, and argued that Mobil’s attempt to read claims of superiority to synthetic oils into the advertisements is contrary to NAD’s 1993 decision. Castrol also contended that Syntec does, in fact, protect in ways other oils can’t because of its polar compounds (esters) and its stabilizers. “Unique Molecular Bonding” “Exclusive Chemical Esters”: Richard Tittel, Castrol’s Director of Technology, Strategy and Product Claims Support, stated that the current formulation of Syntec contains a patented ester unique to Castrol, which has the same bonding characteristics as the ester in the original Syntec formulation, and that the amount of ester present is optimized for the new base stock. Mr. Tittel also stated that testing has shown that this ester performs best at low concentrations, and that there is no difference between the bonding characteristics of the old and new versions of Syntec. In addition, he asserted that in testing performed by Castrol, the new formulation of Syntec outperformed Mobil 1 on Castrol’s proprietary wear test, indicating that Syntec’s unique molecular bonding provides superior wear protection. Castrol also asserted that the results of its wear test (see section on wear test, below), provide substantiation for this claim. Patented Stabilizers Seek Out and Neutralize Harmful Particles: Mr. Tittel also asserted that Syntec “protects in ways that other oils can’t” because of the unique attributes of the patented stabilizer used by Castrol, which acts as both a dispersant and a viscosity modifier. According to Mr. Tittel, the stabilizer acts to suspend and neutralize the effects of harmful particles in the oil (dispersant action), and improve the viscosity, i.e., flow of the oil, at a range of temperatures (viscosity modifier). Mr. Tittel explained that the unique structure of the Castrol stabilizer molecule features a number of nitrogen sites, each of which has the ability to interact with a particle surface so that a single stabilizer molecule has multiple sites of particle stabilization. He asserted that the Castrol stabilizer is therefore unlike conventional dispersants that contain at most two sites for particle interaction, and is consequently more efficient and powerful than “conventionally additized formulations.” III. Castrol Has Not Degraded Syntec: The advertiser contended not only that it has not degraded Syntec, but argued, to the contrary, that its new formulation is actually better than the previous version containing PAO. a) Castrol’s TLA Wear Test: Castrol asserted that the results of its independently performed tests of Syntec and Mobil 1 using Castrol’s proprietary wear test (which measures actual engine wear in the valve train by determining the amount of metal wear in the cam follower), confirm that Syntec causes less wear than Mobil 1 and demonstrate that Syntec provides a layer of protection superior to Mobil 1. Castrol explained that its wear test measures an oil against a reference oil, and that although the two forms of Syntec were not tested head to head, they were each measured against a reference oil of known performance qualities. The advertiser averred that the results demonstrated that, at the 95% confidence level, there is no difference in performance levels between the two formulations of Syntec. While conceding that because the test is proprietary and confidential, the test is used only by Castrol and the test procedures have not been disclosed to any industry body, Castrol contended that its wear test correlates at the 99th percentile with the Nissan KA24E Wear Test, which is in the process of being adopted by the industry in the new International Lubricant Standardization and Approval Committee (“ILSAC”) GF-3 category, and hence correlates to actual engine performance. b) API Markings and Standards: In addition, the advertiser maintained that reformulated Syntec meets all the same rigorous industry certification standards23 that the prior formulation of Syntec did, and, in addition, now passes API’s fuel economy specifications, whereas the old Syntec did not. Further, Castrol noted that reformulated Syntec meets some performance standards that Mobil 1 does not, i.e., the European Performance Standard (Association des Constructeurs European d’Automobiles) and the International Lubricant Standardization and Approval Committee (“ILSAC”) GF-2 status. Critique of Mobil’s Tests: The advertiser contended that Mobil failed to prove that Castrol degraded Syntec and argued that no valid conclusions can be drawn regarding the performance of Syntec from the tests (Pour Point, Cold Cranking and Extended Sequence III E) submitted by Mobil because: (1) Syntec passed all the tests, which were pass/fail tests, and were not designed to establish rankings among those products that pass the test24; (2) The Pour Point Test is not considered by industry to provide any indication of an oil’s ability to protect an engine25; (3) The Ext III E test is neither recognized by ASTM nor sanctioned by any group within the motor oil industry; and (4) Mobil failed to follow proper protocols in performing the tests. For example, according to Castrol, Mobil performed the Cold Cranking Simulator (“CCS”) test at temperatures that exceed those specified in the test procedures by testing the oil at -30 degrees Celsius despite the fact that the test specifies a lower limit of -20 degrees Celcius. In addition, Castrol asserted that the Ext III E test was not conducted using test equipment monitored by and calibrated to the requirements of ASTM, so that even if it were an industry recognized test, it was not conducted properly. Response to Deception Charge: In response to Mobil’s contention that it is deceptive for Castrol not to inform consumers of the change in formulation of Syntec, the advertiser submitted the statement of Richard Kabel, a motor oil expert.26 Mr. Kabel stated that motor oil manufacturers, including Mobil, regularly make changes in their formulations, both base stocks and additives, without disclosing these changes to consumers, regardless of whether the changes result in an increase or decrease in performance. Mr. Kabel stated that in the case of Syntec, there was no need for Castrol to notify consumers of a change in formulation because the overall integrity of the product remained the same. He stated that the industry certification and licensing program is designed to provide motor oil manufacturers with the flexibility to modify their formulations as long as the oil continues to meet the industry standards, as the new Syntec does. Mr. Kabel also asserted that, between 1992 and 1997, Mobil itself changed its formula for Mobil 1 without informing consumers of the change.27
DECISION Background: NAD notes, from its review of the record, that although currently adversaries, the challenger and advertiser in this proceeding have, until recently, been business associates, with Castrol purchasing from Mobil the synthetic base stock used in Castrol’s Syntec motor oil (“Syntec”). Since approximately 1992, Syntec (formulated with Mobil’s synthetic base stock) had been marketed by Castrol as a synthetic motor oil and promoted as offering better protection than conventional motor oil. Beginning in late 1997 or early 1998, Castrol modified its formula for Syntec and began using a different base stock, a hydroisomerized base stock, purchased from the Shell Oil Company. Most of Castrol’s advertising claims for Syntec, however, have remained the same. With the exception of the general principle that synthetic motor oils provide better engine protection than conventional (natural) motor oils, there is very little on which the parties to this proceeding agree. In contention is whether the reformulated Syntec is truly synthetic, the nature of the claims Castrol has made in its advertising for the reformulated product, and whether Castrol has provided sufficient evidence to substantiate these claims. NAD recognizes that the issues raised in this challenge are of great importance to the parties and the industry as a whole, and notes that the advertiser and the challenger have both presented NAD with voluminous submissions that included cogent legal arguments and well-documented support.
DECISION This challenge involves several complex and interrelated issues regarding scientific definitions, testing procedures, motor oil industry practices and the consumer perception of advertising claims. For purposes of clarity, NAD has divided the issues for decision into three questions: 1) Is the reformulated Syntec synthetic motor oil?; 2) Has Castrol substantiated its superiority claims?; and 3) Has Syntec been degraded? I. Is the Reformulated Syntec a Synthetic Motor Oil?: Castrol, like all advertisers in NAD proceedings, has the burden of present ing a reasonable basis for its claims. After carefully reviewing the entire case record, NAD determined that the evidence presented by the advertiser constitutes a reasonable basis for the claim that Castrol Syntec, as currently formulated, is a synthetic motor oil. In reaching this conclusion, NAD relied on industry practice, industry references and the statements of industry experts. NAD noted that not only are base stocks such as Shell’s hydroisomerized base stock marketed as synthetic in 37 countries throughout the world, including the United States, but that Mobil itself, through its alliance with B.P., markets hydroisomerized base stocks as synthetic in Europe and elsewhere. NAD MXC concluded that the decision of the SAE to delete any reference to “synthetic” in its description of base stocks in section J357 (after a full discussion of a request by Castrol and Mobil to limit the definition of synthetic to exclude Shell’s hydroisomerized base stocks and after requests by Shell, first to include Shell’s hydroisomerized base stock and finally to eliminate any use of the term synthetic) and API’s consequent removal of any mention of “synthetic” in API 1509, “Engine Oil Licensing and Certification System,” were decisions by the industry, in essence, not to restrict use of the term “synthetic” to the definition now proffered by Mobil. Further confirmation of this view is found in SAE’s Automotive Lubricants Reference Book, which although not expressly SAE’s opinion, is an extensively peer reviewed publication that explicitly states that base oils made through the processes used for Shell’s hydroisomerized base stock, severe cracking and reforming processes, may be marketed as “synthetic.” NAD also found the explanations of the advertiser’s experts, Professor Roald Hoffmann, a Nobel Laureate, and Sir John Meuring Thomas of the Royal Institute of Great Britain, persuasive. They stated that although there is no build-up of larger hydrocarbons from smaller ones in hydroisomerization, the process, which changes a linear paraffin into a branched-chain one through an intended chemical reaction, with the use of solid catalysts, is a synthesis and creates a synthetic substance. Sir John stated that the fact that in hydroisomerization there is no net increase in the size of the molecule does not distinguish the process from one, such as alkylation, in which there is a net growth. In addition, NAD noted that Dr. Voltz, one of Mobil’s experts, in a paper presented to a symposium of experts in Germany, stated that hydroisomerized oil is synthetic and the process by which it is created is a synthesis. NAD was not convinced by Dr. Voltz’s subsequent explanation that he did not mean to state that hydroisomerized oils were synthetic or that had he been speaking to a group of consumers rather than a group of scientists, he would changed his statements. Given that his audience was a group of scientists and that Dr. Voltz made not one, but several references to hydroisomerized oil and labeled the process through which it is produced as a “synthesis,” NAD found it significant that Dr. Voltz has stated that hydroisomerized oils, such as Shell’s hydroisomerized base stock, are synthetic. NAD was not persuaded that the relatively narrow definition of synthetic offered by Mobil’s experts, i.e., “the formation of chemical products from simple well defined molecules by synthesis or chemical reaction” was the appropriate definition for NAD to apply here, or that Mobil’s proposition that synthetic oil can only be derived by a chemical reaction which combines uniquely defined molecules (as opposed to taking a complex mixture of molecules and processing them into another complex mixture, as is done in the production of hydroprocessed mineral oil), was correct. NAD noted that one of Castrol’s experts, Professor Gates, explained that the processes used to manufacture Shell’s hydroisomerized base stock are parallel to those used to manufacture synthetic fuels through coal liquifaction, which is recognized by the industry as producing synthetic fuels even though it involves the conversion of extremely complex large molecules, as opposed to the building up of larger molecules from smaller ones. Similarly, NAD was not convinced by the conclusion of Mobil’s expert, Dr. Chapman, that no amount of processing can convert a natural material into a synthetic one, particularly in light of Professor Gates observation that this position contradicts Mobil’s description of PAO as synthetic, because the starting material for PAO is a natural material (crude oil). NAD determined that, given the evidence in the record, including the industry practice, the language of the SAE Automotive Lubricants Reference Book, the recent change in J357 and API 1509, and the opinions of several distinguished experts, NAD should not limit use of the term “synthetic” to describe only those motor oils that meet the restrictive definition proposed by Mobil. II. Has Castrol Substantiated its Claims? Mobil challenged several of Castrol’s express and implied claims for Syntec including: a) “Protects in ways other oils can’t,” “Together, the bonding and additive technology provide the best protection you can buy,” and “Nothing protects better than Castrol Syntec Full Synthetic”; b) “unique molecular bonding” and “exclusive chemical esters”; c) “patented stabilizers seek out and neutralize harmful particles”; and, d) Syntec’s formulation has not changed since the product was introduced to the market. a) “Protects in Ways Other Oils Can’t” “…the Best Protection You Can Buy,” and “Nothing Protects Better…” Claims: It is well established that an advertiser is responsible to substantiate all reasonable interpretations of its claims. NAD determined that, in the contexts of these advertisements, these claims could reasonably be understood to be a comparison of Syntec to both conventional and synthetic motor oils. Although, in the past, Castrol has limited its advertising claims for Syntec to clearly qualified comparisons with conventional motor oils, Castrol’s recent advertising omits this limiting language. For example, Castrol’s 1997 Test 4E: Test on Race Track television commercial contains no reference to conventional oils. Similarly, Castrol’s three 1998 television commercials (Aerial Dogfight, Spiderman and Air Force) never allude to conventional motor oils. Further, Syntec’s 1998 label states “UNIQUE MOLECULAR BONDING. Castrol Syntec FULL SYNTHETIC. PROTECTS IN WAYS OTHER OILS CAN’T. SAE 10W-30. FULL SYNTHETIC MOTOR OIL,” and does not mention or otherwise restrict the comparison to conventional motor oils. In addition, the challenger submitted consumer perception studies (that were not challenged by the advertiser) that support NAD’s interpretation of the claim. For example, in one of the studies, of the 200 consumers who viewed the Dogfight commercial, 75% stated that they believed that Syntec protects engines as well as or better than the best selling brand of fully synthetic motor oil. For all of these reasons, NAD concluded that these advertisements could reasonably be interpreted by consumers to mean that Syntec provides superior protection in comparison to all other motor oils, including synthetic oils.28 Having reached this conclusion, NAD reviewed the record to determine whether the advertiser can substantiate this claim, both against conventional and synthetic motor oils. Comparison to Conventional Oils: As support for this interpretation of its superior protection claim, Castrol relied totally on a 1993 NAD decision regarding the same or similar claims for Syntec.29 In evaluating its relevance to the current challenge, NAD notes that the 1993 case is distinguishable in several important ways: First, the formulation of Syntec that was the subject of 1993 challenge is completely different from the formulation of Syntec on the market today. In 1993, Syntec was made from a PAO base stock and, as an additive, contained one type of ester. Syntec is now formulated with a hydroisomerized base stock, and, as an additive, contains a different ester. Consequently, a finding by NAD that the prior formulation of Syntec was superior to conventional oils provides no basis for finding here that a new, completely different formulation of Syntec is also superior.30 Second, despite the advertiser’s assertion that its TLA test establishes that the current Syntec is equivalent in engine protection to the prior formulation of Syntec, the advertiser presented no evidence of superiority of the current Syntec in comparison to a representative sampling of the conventional motor oils currently on the market.31 In fact, the advertiser did not submit testing regarding any conventional motor oil. Without testing of a wide range of conventional oils, the advertiser cannot support its superiority claim against conventional oils.32 Finally, the testing submitted by the advertiser in the 1993 challenge was much more comprehensive than the limited testing presented to NAD in the instant case. In the earlier challenge, the advertiser submitted, and NAD relied on, the results of four types of proprietary tests, one denominated the Drain test, and three other unnamed tests, which NAD found, when taken together, demonstrated superior resistance to film breakdown and allowance of far less metal-to-metal contact “in several critical high-stress junctures of the engine” than conventional motor oils. (emphasis added) In contrast, in the instant challenge, the advertiser has presented only one proprietary test. Comparison to Synthetic Motor Oils: With regard to a comparison to synthetic motor oils, having tested against only one brand of synthetic motor oil, NAD determined that Castrol’s evidence was inadequate to substantiate this unqualified claim.33 NAD found, moreover, that the advertiser did not prove superiority against that one synthetic product tested for the reasons stated in the section on Comparison to Conventional Oils, above, i.e., the advertiser relied on the results of only one test and, in contrast to the findings in the 1993 NAD decision, there was no showing here that the test used measures engine wear at several critical high-stress junctures of the engine, but only at one juncture, the valve train. b) “Unique Molecular Bonding” and “Exclusive Chemical Esters” Claims: As support for these claims, Castrol submitted a statement from Richard Tittel, a Castrol employee, who asserted that the ester now used by Castrol in Syntec is patented and unique to Castrol. The advertiser also provided a printed sheet produced by a chemical manufacturer, which describes the typical chemical and physical properties of the ester and recommends the application and typical treat levels. NAD accepts Castrol’s representation that its ester is patented and finds that this provides sufficient support for Castrol’s claim of having an exclusive ester. However, esters are used in several motor oils, and there is no evidence in the record that Syntec’s ester is unique in its bonding characteristics. Moreover, Castrol has represented that its new ester performs at parity with the ester used in its prior formulation of Syntec with respect to its bonding capabilities, despite the fact that the new ester is different from the former one. Consequently, NAD determined that Syntec’s “unique molecular bonding” claim has not been substantiated. c) “Patented Stabilizers Seek Out and Neutralize Harmful Particles” Claim: NAD determined that this claim, which is monadic and makes no reference to singularity,34 was adequately substantiated. The advertiser provided a copy of the patent for the stabilizer, to corroborate the first (“patented”) part of the claim, and a comprehensive explanation of how the structure of the Castrol stabilizer molecule works to neutralize harmful particles, to substantiate the last (“neutralize”) part of the claim. While no evidence was proffered relating to “seeking out” part of the claim, NAD concluded that this was puffery, and needs no substantiation. d) Syntec contains the same ingredients it has since Castrol began selling Syntec: Because neither party submitted consumer perception data to support its position with respect to this implied claim, NAD used its expertise to determine the message conveyed to consumers by the product name and the challenged advertisements. NAD found that neither the product name nor the advertisements, either alone or together, convey the message that Syntec’s ingredients have remained unchanged since Castrol began selling Syntec. In reaching this conclusion, NAD notes that motor oils do not customarily include a list of ingredients on their labels, and that neither Syntec nor Mobil 1 containers include such a list. Significantly, the advertiser’s labeling and other advertising for its prior formulation did not promote the fact that Syntec contained PAO, but simply highlighted the synthetic quality of the product. Consumers therefore are not likely to have an expectation of a specific base stock. Moreover, NAD was persuaded by the statement of Richard Kabel, formerly a senior engineer at General Motors responsible for all engine oils for passenger cars, who has worked in the industry for over 40 years, that it is routine industry practice for motor oil manufacturers to change their formulations, including base stocks and additives, without informing consumers, as long as the overall integrity of the product remains the same. III. Has Syntec Been Degraded?: NAD determined that, although Mobil presented clear evidence that Castrol has made a major change to Syntec’s formulation (substituting one type of synthetic base stock for another, and substituting one type of ester additive for another), it was not sufficient to demonstrate that Syntec has been “degraded.” NAD ruled that the tests Mobil conducted to demonstrate degradation are designed to be pass/fail tests, and are not intended or designed to comparatively rank or measure competing passing motor oils for performance capability. In addition, the changes made to the recommended test protocols raise questions about the reliability and probative value of Mobil’s test results. Moreover, the Ext III E Test is not a recognized industry test, and The Pour Point Test is not considered by industry to provide any indication of an oil’s ability to protect an engine. Given the undisputed fact that Castrol’s new formulation of Syntec meets all required industry standards for motor oils (and, in fact, passes more tests than the prior formulation), and in the absence of any credible evidence that Syntec’s performance has suffered as a result of the change in formula, NAD has concluded that it is not necessary to reach the question of whether or not Syntec has been degraded.
CONCLUSION NAD concluded that the advertiser provided a reasonable basis for its claims that Castrol Syntec is “synthetic” and contains “patented stabilizers [that] seek out and neutralize harmful particles” and “exclusive chemical esters.” NAD also concluded that Syntec’s advertising did not imply that Syntec’s ingredients now are the same as they have always been. However, NAD determined that the advertiser’s evidence was insufficient to support its superiority claims (“protects in ways other oils can’t,” “Nothing protects better than Castrol Syntec Full Synthetic,” and “Together, the bonding and additive technology provide the best protection you can buy”) as against conventional or synthetic motor oils, or to support the claim that its esters provide “unique molecular bonding.” Consequently, NAD recommends that these claims be modified or discontinued.
ADVERTISER’S STATEMENT As the NAD notes, a central issue in this proceeding—the synthetic nature of the hydroisomerized base stock used in Castrol Syntec— is a matter of great significance to the parties and to the entire industry. We are gratified that the NAD has determined that Syntec’s hydroisomerized base stock is synthetic—a decision that is in accord with the conclusions of distinguished academic and industry experts and a leading industry publication. Castrol remains committed to upgrading its products and producing the highest quality synthetic motor oil. The NAD’s decision also concludes that Castrol did not present sufficient substantiation for certain advertising claims (including several that Castrol discontinued before this proceeding began). Castrol is now in the process of a further upgrade and reformulation of Syntec, and is pleased to accept the NAD’s recommendations in the process of developing and substantiating Syntec advertising. Castrol appreciates the time and energy the NAD has devoted to resolving the important issue of the meaning of the term “synthetic” in the motor oil industry. ^l
(#3526 PBS, closed 3/22/99)
1 Both parties to this proceeding agree that synthetic motor oil provides better engine protection than natural, i.e., “conventional” motor oil.
2 Mobil asserted that while hydroprocessed mineral oil is premium mineral oil, it is nonetheless conventional, and not synthetic oil.
3 The challenger asserted that making the change significantly increased Castrol’s profit margin because PAO is nearly twice as expensive as mineral oil.
4 Perez Statement.
5 Professor Perez cited isomerization, reforming, hydrotreating and hydrocracking as some of the many chemical and physical processing steps applied to
petroleum to produce a variety of useful products, but said that they do not produce synthetic products. He stated that hydroisomerization does not create
synthetic material because it does not create or build molecules, but merely rearranges the same molecules that were present in the original petroleum fraction.
6 In contrast, Dr. Chapman cited Rayon as a natural material that, although substantially different from the cellulose from which it is made, is still a natural fiber.
7 The challenger asserted that neither of the two processes to which Castrol subjects the petroleum, cracking and isomerization, can convert these natural
molecules into synthetic ones.
8 Mobil asserted that although another of its experts, Dr. Voltz, when presenting a paper at a German symposium for scientists on waste oil reduction, had referred
to hydroisomerized oil as synthetic, Dr. Voltz does not believe this to be correct. Dr. Voltz stated that while he had grouped motor oils into two classes,
conventionally refined and non-conventionally refined oils (thereby classifying hydroisomerized motor oil as synthetic), he did not mean to state that
hydroisomerized oils were synthetic. Dr. Voltz explained that had he been speaking to a group of consumers rather than a group of scientists, he would have
emphasized the differences in manufacturing processes and the superior performance characteristics of PAO as opposed to hydroisomerized base stock.
9 40 C.F.R. 435.11(x) states, in part: “The term synthetic material…means material produced by the reaction of a specific purified chemical feedstock, as opposed
to the traditional base fluids such as diesel and mineral oil which are derived from crude oil solely through physical separation processes.”
10 The challenger asserted that a December 1997 survey by Gallup found that over 49% of consumers erroneously recognized “Castrol Syntec” as a brand of
synthetic oil, while less than 30% of consumers surveyed considered three motor oils that used the word “synthetic” as part of their product name to be synthetic.
11 The challenger asserted that the results of a survey conducted for Mobil show that 65% of the consumers that viewed one of the “Dog Fight” commercial were
left with the impression that Syntec is a full synthetic motor oil, and an additional 31% thought that Syntec is a synthetic blend motor oil.
12 The SAE is a motor-oil industry standard-setting body.
13 Mobil asserted that the debate culminated in SAE taking no position on the definition of synthetic, and not, as the advertiser contended, in recognizing that
Shell’s hydroisomerized base stocks can be marketed as synthetic.
14 Mobil cited a letter from SAE’s legal Administrator, Steven Daum, stating that the positions set forth in the Automotive Lubricants Reference Book are only the
positions of Messrs. Caines and Haycock, the authors of the book, and not those of SAE.
15 The challenger dismissed as totally without merit Castrol’s assertion that NAD had previously found these same claims for Syntec substantiated. Mobil noted
that at the time of the prior challenge by Quaker, in 1993, Syntec was a completely different product, containing at least 70% PAO and approximately 7% ester.
16 The challenger asserted that it tested (and had an independent laboratory, Savant, Inc., separately test) samples of the current and former versions of Syntec.
Mobil provided test results showing that the current version contains no PAO and either no or only a trace amount of ester, while the former version of Syntec
contains 70% PAO and 7% ester.
17 The challenger maintained that the following motor oils contained esters: Mobil 1 Advanced Formula Full Synthetic, Valvoline Synpoweer, Pennzoil Performax
100, and Quaker State Ultra Premium Full Synthetic.
18 The challenger noted that photographs of the oil pans, taken after this test, dramatically illustrate the difference between the old and current versions of
Syntec: the photograph of the pan used in the test of the old version shows only some broken down oil, while the photograph of the pan used for the current
version of Syntec contains blackened sludge.
19 Castrol noted that Mobil’s survey, which established that consumers recognized “Castrol Syntec” as a brand of synthetic oil, is irrelevant, because Castrol
Syntec is, in fact, synthetic.
20 Castrol summarized Mr. Wardle’s description of the synthesis of Shell’s hydroisomerized base stock through hydroisomeriztion of wax as follows: The synthesis
process consists of three major steps: (1) hydroprocessing; (2) distillation; and (3) dewaxing. The advertiser explained that through these processes, the
hydrocarbon material (wax) from which the base stock is synthesized undergoes a rearrangement of its carbon backbone, thus converting essentially linear
compounds into branched compounds and saturated ring structures. According to the advertiser, the end product results from the breaking and formation of
chemical bonds, and has considerably different properties from the original wax. Castrol contended that the chemical changes improve the viscosity and
volatility of the base stock, making it less likely to combine with other chemicals found in an operating engine to form deposits.
21 Castrol asserted that both Professors Gates and Hoffmann noted that synthetic materials can always be traced back to a material of natural origin, for example,
PAO’s and esters are processed from natural material, i.e., petroleum and either coconut or palm oil, respectively.
22 Dr. Jacobson explained that in addition to establishing a voluntary licensing and certification program under which oil marketers are licensed to display certain
API marks on their products, API 1509 also defines the conditions under which test procedures run on one oil type can be “read across” to another oil, meaning
that a complete new set of tests is not required when one type of oil is substituted for another. Dr. Jacobson added that it is common practice for motor oil
manufacturers to change formulas, and API 1509 allows certain changes without the need for repeating many standard tests.
23 Castrol conceded that these standards establish minimum performance guidelines.
24 Castrol asserted that Richard Kabel, the man responsible for developing many of the performance tests used in the motor oil industry, has stated that these
“pass/fail” tests were not designed and cannot be used to rank oils or to discriminate between oils.
25 Castrol asserted that Mobil’s expert, Dr. Perez, observed in his statement that the Pour Point Test “is not the best test.”
26 Mr. Kabel is a mechanical engineer who has been actively involved in evaluating, formulating and analyzing motor oils for over 40 years, including 32 years in
the fuels and lubricants department of General Motors research.
27 Mr. Kabel stated that Mobil changed its product by lowering the concentration of important additives, without disclosing the change to consumers.
28 Moreover, NAD noted that while the advertiser connects its “protects in ways other oils can’t” claim in its 1998 television commercials to its “patented
stabilizers,” both its current labeling and 1997 commercial connect the claim to Syntec’s “unique molecular bonding.”
29 In Re Castrol, Inc., (NAD Case Reports, Vol. 23 No. 6 pp. 47-48 August, 1993)
30 NAD also notes that the claims in the 1993 challenge were not identical to the challenged claims. The 1993 advertisements touted the bonding strength of
the oil, without any mention of an added ester, and NAD found that the Syntec’s superior bonding abilities “go to the strength of this synthetic oil versus
conventional oil in protecting against engine wear.” In more recent advertisements, the advertiser represented that Syntec contains exclusive chemical esters,
which are the source of the “layer of protection” and does not claim that the protection is provided by the oil itself. In a 1998 brochure, however, Castrol claims
that “Castrol has exclusive base stocks that actually bond to engine surfaces leaving a layer of protection far stronger than conventional oils. While this claim
may be similar to the 1993 claim, it is not in accordance with Castrol’s submissions, which assert that the esters cause the bonding, not the non-polar base stocks.
31 NAD notes that conventional motor oils currently on the market may also have formulations that are different from their 1993 formulations.
32 In fact, Castrol appears to be basing its superiority claims on attributes that it derives from its additives, and it is possible that a conventional oils now contains
anti-wear additives that provide the same protection that the additives in Syntec do.
33 Although NAD had some concerns about the TLA test, having found testing against one brand to be insufficient to support the claim, NAD will not reach the
question of the sufficiency of Castrol’s test to substantiate this claim, even if a full range of synthetic motor oils were tested..
34 NAD noted that the challenger conceded that virtually all motor oils contain additives that act as stabilizers and neutralize harmful particles.