Rossi Responds to IH’s Motion to Dismiss in Court Case

https://animpossibleinvention.…sdce-16-21199__0018-0.pdf
PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' ON TO DISMISS
VI. COUNT VI: Fraud

From the complaint, COUNT VI: FRAUD AND DECEIT (IH,IPH, CHEROKEE, DARDEN & VAUGHN)
https://animpossibleinvention.…sdce-16-21199__0001-0.pdf

The core of this Count starts with this:

Quote

34. In early 2012, ROSSI and LEONARDO were contacted by Defendants DARDEN,
VALfGHN and CHEROKEE, who expressed an interest in licensing the E-Cat IP in the United
States of Arnerica.

I notice something immediately. Rossi was contacted by Darden, or Vaughn, or both, but one is only contacted by a corporation through documents executed by the corporation. Darden and Vaughn were officers of the corporation. However, were they acting for themselves, or for the corporation? What, for example, would "We are interested" mean to Rossi? There is no Agreement with a corporation unless it is exectuted by an officer or authorized representative or agent of the corporation, and such acts will be clear. Corporations cannot make verbal agreements, as such.

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At each of the aforementioned meetings, DARDEN, VAUGHN and CHEROKEE
repeatedly stated that "CHEROKEE has billions of dollars at its disposal, and is willing to pay
ROSSI and LEONARDO" to license the E-Cat IP.

The MTD calls attention to the obvious problem here. Quotation marks are used, but this could not be an exact quote. This is Rossi's memory of what it meant to him. Cherokee could not have stated that, other than in writing, and if it had, we'd have seen that alleged. Vaughn and Darden might have said something like that, but each would have put it differently.
However, this is about a motion to dismiss. If a claim in a Complaint is preposterous, is it still assumed to be true for purposes of considering a Motion to Dismiss?
This seems to be the core of the Count:

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43. Upon expressing concern about the new company, to induce ROSSI andLEONARDO's execution of the license agreement, DARDEN and VAUGHN, with fullknowledge of the falsity of their statements, assured ROSSI and LEONARDO that:
a. "CHEROKEE and INDUSTRIAL HEAT, LLC are the same company";
b. that IH was "entirely owned and funded by" CHEROKEE; and
c. that "CHEROKEE guaranteed that LEONARDO will be paid in accordance with the License Agreement."

If they actually said that, those were false statements. However, the first was obviously false. The second was false, but Rossi might not have known that, and the third was meaningless if not executed as an agreement with Cherokee.

However this is Rossi's understanding and memory of what was said to him. However, has Rossi been harmed by these false statements (or misunderstandings). No. He has not been paid $89 million that he believed was due. If IH goes bankrupt, then he might have a claim, but not against Cherokee, rather, assuming he could prove that those statements were made, it would be against Darden and Vaughn. There is also the statute of frauds. An agreement that is binding beyond one year, as I understand the matter, must be in writing. It's common sense, because memories of conversations are fragile and unreliable and shift with time.

From the Motion to Dismiss:
https://animpossibleinvention.…/ih-motion-to-dismiss.pdf

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to plead an action for fraud and deceit sufficiently, Plaintiffs must allege facts showing that “(1) the Defendants made a representation on which the Plaintiffs [were] meant to act; (2) the [D]efendants knew the representation was false; and (3) the [P]laintiffs relied on the representation to [their] detriment.” ... In addition, fraud claims must be pled with particularity pursuant to Rule 9(b)..., satisfied if a complaint sets forth “(1) the precise statements, documents, or misrepresentations made; (2) the time, place, and person responsible for the statement; (3) the content and manner in which these statements misled the plaintiffs; and (4) what the defendants gained by the alleged fraud.” Id. (citation omitted). Parties may not recast breach-of-contract claims as tort claims.

Quote

the Complaint lumps Darden, Vaughn, IH, and Cherokee together in alleging that each Defendant made every purported misrepresentation, see Compl. ¶ 112, which is patently implausible.6

I find it difficult to understand the complaint by Rossi about the formation of IPH, which seems to have no bearing on any possible harm to Rossi. He is claiming fraudulent inducement in the execution of the First Amendment, but I sure don't understand it. IPH was not let off the hook by that Amendment. Yes. To misrepresent ability to pay can constitute fraud, separate from failure to pay. There is a possible issue I can see, but I have no fact to back it up. If the new investment in LENR went to IPH, it would not be subject to attachment by Rossi for debt to him.

If a fraud was perpetrated, it was not by Cherokee, though. It would have been Vaughn and Darden, and, then, IH. There is nothing to connect Cherokee to this, other than the coincidence of officers. If Darden and Vaughn misrepresented Cherokee's involvement, that would be to induce Rossi to license IH, where they were also officers and investors. However, for Darden and Vaughn to point to Cherokee, to make him sit up and notice and agree to talk with them, would not be fraud. They do, in fact, have access to very substantial investments, and "misappropriate" his IP. Yet, in fact, they paid him for the IP, immediately and with a delayed payment.

IH is correct that this is an attempt to convert an alleged breach of contract to a tort claim. The Memorandum does not address the problem of particularity.

Quote

Allegations of a "strong financial status" and "net worth of Twenty-One Million Dollars ($21,000,000.00)" made to induce the entry into a contract have been held sufficient to sustain a claim for relief
predicated upon fraud in the inducement. Williams v. Peak Resorts Intern., lnc.,676 So.2d 513,
515-516 (Fla. 5th DCA t996).

Here is the case. http://www.leagle.com/decision…676So2d513_11073/WILLIAMS v. PEAK RESORTS INTERN. INC.
That was a split decision. The matter is not simple. It is not at all clear that there was detrimental reliance by Rossi. IH has refused to pay, not been found unable to pay. The matter would have been the same if it had actually been Cherokee investing in IH or guaranteeing payment.

I do not see how this Count can stand as to Cherokee. I do not see how IPH could be held responsible for this. As to Darden, Vaughn, and IH, then, the other arguments raised by IH still stand, and it is not clear to me that the exception carved out with Williams v. Peak Resorts applies here. I'd want to study the cases more, and I've reached my limit on this Count.

I predict dismissal of the count, based on no actual harm being alleged related to it, and a number of other defects.

https://animpossibleinvention.…sdce-16-21199__0018-0.pdf
PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' ON TO DISMISS
VII. COUNT VII: Constructive and Equitable Fraud

From the complaint, COUNT VII: CONSTRUCTIVE & EQUITABLE FRAUD (IH,IPH, DARDEN & VAUGHN)
https://animpossibleinvention.…sdce-16-21199__0001-0.pdf

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121. As required by the License Agreement, ROSSI and LEONARDO fully disclosed
to DARDEN, VAUGHN, IP and IPH their valuable intellectual property and trade secrets
including, but not limited to, designs, formulas, operating manuals, and other proprietary
information comprising the E-Cat IP with the expectation that the Defendants would protect such
information from disclosure to competitors andlor any other third party to the detriment of ROSSI
and LEONARDO.
122. Unbeknownstto ROSSI and LEONARDO, the Defendants DARDEN, VAUGHN,
IH, IPH began diligently setting up a series of ofÊshore foreign shell companies, holding
companies and management companies as part of a scheme to deprive ROSSI and LEONARDO
of their intellectual property and trade secrets.
I23. Upon information and belief,, after acquiring ROSSI and LEONARDO's
intellectual property and trade secrets, DARDEN, VAUGHN and IH began supporting and
investing in companies which are in direct competition with ROSSI and LEONARDO.
124. Upon information and belief, DARDEN, VAUGHN and IH have deliberately and
knowingly disclosed some or all of ROSSI and LEONARDO's intellectual property and trade
secrets to the aforementioned competitors in which the Defendants had invested.

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There is no company in actual competition with Rossi. There is no company engaged in the business of selling LENR reactors (including Rossi). No connection is shown or alleged between the other companies as to how they would further the "scheme." Rossi is alleging a "scheme" with no actual evidence and no demonstrated harm. He also goes on to assert the patent nonsense, i.e., the patent applications filed that have done Rossi no harm. There is no claim of actual patent infringement. (As David French has pointed out on Infinite Energy, it is not patent infringement to file a patent. It could be a disclosure of a trade secret.) So far, nobody has made any functioning devices using all that IP, other than possibly Rossi.

From the Motion to Dismiss:
https://animpossibleinvention.…/ih-motion-to-dismiss.pdf

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To the extent that this claim is based upon Defendants’ alleged disclosure of the E-Cat IP, as stated previously ad nauseam, Defendants were not obligated under the License Agreement to refrain from disclosing the E-Cat IP and the Complaint fails to identify any provision in the License Agreement to the contrary.

Moreover, the entire structure of the License Agreement belies any notion that any Defendant owed any fiduciary duty to Plaintiffs:

IH and IPH could disclose or sublicense the ECat IP to whomever they wanted, License Agreement §§ 1, 16.4;

Plaintiffs had a broad obligation not to compete against IH and IPH, but there was no correspondingly broad obligation imposed on IH or IPH, id. § 13.3;

IH and IPH could participate in patent prosecution and maintenance “to the extent it deems necessary or desirable,” regardless of Plaintiffs’ views on the matter, id. § 7.1;

IH or IPH could force Plaintiffs to assign “the Licensed Patents with respect to the Territory” to them, again regardless of Plaintiffs’ views on the matter, id. § 10;

and Plaintiffs owed a duty of confidentiality to IH and IPH, but neither IH nor IPH owed a corresponding duty of confidentiality to Plaintiffs, id. § 16.4. Nothing about this relationship between Plaintiffs and Defendants supports Plaintiffs’ misguided view that somehow Defendants owed Plaintiffs any fiduciary duty.

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The Memorandum:
[quote]... the negotiations between the parties to the License Agreement "established a confidential relationship between the parties in the course of which the Plaintiff disclosed secret information to the Defendant and that the Defendant in this position of trust and confidence used the information to the injury of the Plaintiff." See Biodynamic Techs., Inc. v. Chattanooga Corp.,644F. Supp. 607,612-13 (S.D. Fla. 1986). http://law.justia.com/cases/fe…ts/FSupp/644/607/1558955/

This case is radically different. Yes, an obligation of confidentiality can be inferred, that is what that case was about. Biodynamic showed Chattanooga their device. Negotiations broke down, and then Chattanooga allegedly used what should have been confidential information in the development of their own device, and they were actually in competition in the market. This was a case claiming unfair competition, and there actually was such competition. And there was no License Agreement. Had Rossi sold the 1 MW power plant to IH, under a confidentiality agreement, IH could have been restrained from disclosing the technology to someone else. But IH did not merely buy that power plant, it purchased a license, allowing sublicensing, and such sublicensing was not subject to approval by Rossi. Essentially, they could disclose the technology to anyone, pursuing their own business, which is exactly what they argue. IH owns the entire market for E-Cat IP in the territory. Rossi is

The strongest part of the Memorandum arguments here is that Rossi has claimed there was a confidential relationship prohibiting disclosure. Rossi is insisting on the rule that if it's claimed, it must be accepted. However, the documents filed with the Complaint may be consulted and compared, and the claim of a duty of non-disclosure is in conflict with the ability of IH to sublicense. Sublicensing to a "'competitor" is turning a possible competitor into a customer. Again, there are no competitors in this market yet, only companies doing research toward possibly entering it. If they can get a leg up by licensing Rossi technology, this would be exactly what the Agreement would contemplate, and they may be able to improve the technology.

And none of this would harm Rossi in his remaining territory. Those products could be infringing if sold there. But none of this has actually happened, so there is no harm, even if a disclosure was improper.

I predict that the Count will be dismissed. Rossi reminds the court in the argument here that a Motion to Dismiss faces great difficulty. I will point out that this is not an argument against it.

My udnerstanding of sane plaintiffs is that they accept motions to dismiss counts that would be difficult to prove, that would merely complicate the case, that will simply increase liltigation costs. However, Rossi has stretched a number of things to assert the jurisdiction of the Florida court. It's U.S. District Court because of the patent issues, but no legitimate patent issues have been raised. It's Florida because supposedly IH deliberately did business in Florida, i.e., selling power to the "customer." Which was apparently Rossi with a mask on. But IH has not alleged that, and did not challenge the jurisdiction of the court. I don't think they mind.

https://animpossibleinvention.…sdce-16-21199__0018-0.pdf
PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' ON TO DISMISS
V[I. COUNT VIII: Patent Infringement

From the complaint, COUNT VIII: PATENT INFRINGEMENT (U.S. PATENT)(rH & rPH)
https://animpossibleinvention.…sdce-16-21199__0001-0.pdf

Rossi alleges patent infringement from actions that do not infringe on any patent. I find it difficult to believe that any competent attorney would write this. Popular ignorance might think that alleged improper filing of a patent is "infringement," but it is not. If a patent is improperly filed, it's a waste of paper. David French (patent attorney) covers this on Infinite Energy. http://www.infinite-energy.com…ustrial-heat-lawsuit.html

From the Motion to Dismiss:
https://animpossibleinvention.…/ih-motion-to-dismiss.pdf

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Contrary to Plaintiffs’ belief, filing a patent application is not an act of patent infringement. As the Federal Circuit explained just one year ago:

Classen Immunotherapies, Inc. v. Elan Pharms., Inc., 786 F.3d 892, 898-99 (Fed. Cir. 2015).

Now, in the Memorandum, does Rossi show any case law showing that a patent application can be an infringement? No. In fact they admit that the case cited is the only one they could find. Instead they seize on the word "generally" in the above as if this is a claim that patent application can infringe.

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"Whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. 35 U.S.C.A. 5271(West).

So they then refer to the dictionary meaning of "uses." And then

Quote

In their Complaint, Plaintiffs allege that Defendants have infringed upon Plaintiffs' patent by
(a) using Plaintifß' patented intellectual property to apply for patents in multiple foreign countries (DE:1, nß2, 133), and
(b) using Plaintiffs' intellectual property to solicit millions of dollars in investments for future development. (DE:1, '1TT69, 70, 134). Such uses were directed and
undertaken by Defendants and their counsel in the United States.

As to (a), Rossi has substituted "patented intellectual property" for "invention," as if they were the same. Intellectual property is used to make an invention. One may use intellectual property without making anything, one could use it as a reading as a piece of performance art. Would this infringe on the patent? The making or operation of the invention is described by the patent. Others may create new patents that incorporate prior art; if that art is still patented, this patent will be derivative, but the patent itself, entirely incorporating prior art, would not be infringement. One may apply for a patent in error. That is not patent infringement. It would be a patent defect, something to address with the Patent Office, and a patent issued in error may be found void in the courts.

https://en.wikipedia.org/wiki/Patent_infringement. Further, no actual harm is alleged, no damage caused to Rossi. It is claimed that the foreign patents were directed by defendants in the United States. But applylng for a foreign patent is not infringement of any United States patent. It is only use of the invention within the U.S. that would be infringment, and, lest we forget, IH has a licence to use this IP within the U.S. So if it was used here, even if we accept the idiosyncratic definition of "use," it was licensed use, not infringement, and if it was used there it was not infringement of the U.S. patent. ("Use" there could be infringement of a foreign patent, but that would not be the business of U.S. courts.)

As to (b), money that was raised by IH on is also not a "use" of the invention as to infringement. IH is the licensee for the U.S. Again, Rossi confuses intellectual property with the invention. (There is a separate issue that IH may not have depended at all on Rossi IP in raising that money. This is all speculation by Rossi.)

I predict dismissal of this Count.

https://animpossibleinvention.…sdce-16-21199__0018-0.pdf
PLAINTIFFS' MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS' ON TO DISMISS
The memorandum did not address item 9 in the Motion to Dismiss, though it may have addressed this through the other counts.

From the complaint,
https://animpossibleinvention.…sdce-16-21199__0001-0.pdf

From the Motion to Dismiss:
https://animpossibleinvention.…/ih-motion-to-dismiss.pdf

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IX. Plaintiffs Impermissibly Lump Defendants Together in Several Counts.

My present understanding and prediction: Cherokee will be dropped as a defendant. All Counts will be dropped except for Count 1. The court may allow Rossi to amend the complaint to allege estoppel, as to the issue of the missing signature (and agreement to the start date) (Estoppel applies if parties behaved as if there was an agreement, even if it was somehow defective or missing.)

The defendant has until Monday to respond to this, as I understand the matter, then the court has some time to rule on the Motion to Dismiss.

Quote from axil

The time to make the case against Rossi was during the test. This is the time when evidence preparation is most persuasive.

I assume that IH knew what it was doing and that it was all documented. While I could be mistaken, people who operate on this level usually have their act together. Dewey has disclosed that IH attempted to question the ERV, and he did not respond. We have very little information from the IH side (must of it is from Dewey disclosures, which are sketchy and often deliberately vague.)

Through gross incompetence on the part of the IH test director and contract administrator if this positions in fact existed at the time during the test which I doubt. Rossi might get away with the con of the century. IH has let you down. As a investor in IH, you should look into this debacle of a situation and act against IH accordingly.[Dewey has apparently been on board and is still on board. He knows much more than he is saying here. He knows if there is a "situation" or not.

The 1 MW test and the ERV report is not the core issue, it just looks like that. The core issue is that the Agreement provided that Rossi transfer the IP to IH, with full written disclosure of everything needed to make devices, including the "secret sauce." IH spent some years, apparently, attempting to get this to work. They built the Lugano reactor, and their own tests of it showed no XP. (According to Dewey). Also according to Dewey, they asked Rossi for help getting the devices to work and he refused, being too busy with running the 1 MW test.

When I have something of legal consequence to ask someone, I don't phone them up and ask the question. I might send an email, and sometimes I'll write it up. I might send a fax. but a lot of people rely on verbal communication because they think it is easier. I would guess that the request of the ERV and the request to Rossi were written, not verbal. That's how people who are in business, do business.

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Through gross incompetence, IH does not have the evidence generated during the test to prove that Rossi was scamming IH, if he was in fact doing it. We just don't know, we don't have any valid evidence.

We don't know what evidence they have. Jed has been telling us he has seen some the data, and that the data showed no XP -- or no major XP. However, this is being missed. Even if the ERV certified the test, and even if there actually was major power being generated, IH doesn't owe the money to Rossi, my opinion, because the central purpose of the agreement was frustrated. It's worthless to them if they cannot make the devices!

As anyone else noticed that the Validation test and the General Performance test do not actually specific power output? You could technically satisfy the test requirements with a few watts.

There also is no reliability requirement. Because there is no power requirement, there might only be one device actually working.

Abd:

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A test of the Sniffex would take a few minutes to a few hours, and could be assessed by a non-expert.

You mean like this one? http://sniffextest.blogspot.com/ That is a double blind objective test in which the Sniffex detector is completely unable to detect the difference between an extremely potent gun powder and sand. The suit against Randi *was* dropped (you will find no court record of its conclusion). Dowsing fails every objective double blind test which has been properly done. Dozens of people, probably many hundreds, have been killed and maimed by the use of dowsing rods as explosive detectors so this is by no means a crime without victims. The president and chief attorney for Sniffex were found guilty of stock manipulation by the SEC and ordered to "disgorge" $6M in illgotten profits and an attorney who lied and committed fraud with respect to either Sniffex or a similar device (Can't recall exactly) was sentenced to five years in prison in the US. Several people have been sentenced to up to 8 years in prison in the UK for selling other variations of dowsing rods as explosive detectors. I proposed a better punishment. Drop them into the center of a dense field of land mines with one of their devices and ask them to walk out.

See: http://www.vanityfair.com/news…/fake-bomb-detectors-iraq
and the definitive site for unmasking and combatting this atrocity: http://sniffexquestions.blogspot.com/
Basically everything Abd said about this issue is wrong which makes wonder about all the rest of the verbal diarrhea he provides.

Not all frauds are equal. Fraudulent explosive detectors are lethal to innocent people.

Wow! Somebody said something important because the thread was flooded with nonsense FUD again for hours ...

Here is an executive summarey of the latest 12 hours...

Quote from "FUDing Abd - trolling Jed - dogding Dewey - Renzzzie + little Maaary"

blah blah blah ... ad infinitum ...

This analysis is excellent:

Quote from "Wyttenbach"

To say it maximally / clearly: Only full cones or idiots waste 11.5 Millions. If they feel the tears coming, then they should go either to: A priest, psychiatrist, or to a professional woman... of course not to a forum, which is meant to be about technology.The main target of our troll gang (names are obvious) is to flood the forum with shallow water, which should hide useful information.

And to find the important question that started it, I had to go back pages ... tactics are obvious ...

Quote from "Timar"

I guess such negative feedback on the plant performance would have been kind of hard to reconcile with IH simultanously raising >100 million dollars in investment money using the said 1MW plant...

Dodging Dewey makes immidiate accusations ... What is the lie Dewey. Didn't IH raise money, or?

Quote from "Dewey - the defecating pigeon"

Timar - another batch of lies directly being spread by Planet Rossi.

Then when Timar makes an obvious observation it is instantly downvoted by, you guessed; Renzzie, Abd, Dewey and Mary ... (Jed, why are you not paying attention here... are you losing it?)

Quote from "Timar"

I fully understand your frustration, Dewey. All the time and effort that goes into producing copious amounts of FUD and still it won't suffice to drown that nasty little fact.

So, what we know for sure is that at least Woodford visited the MW plant several times and then invested $50M on the information from due diligence including the 1st and 2nd ERV reports, which we know are the same as the 3rd and final reports. Why is it so important for the FUDders to hide this fact?