IH considering counterclaims

As expected, the judge granted the request for an extension for time to file an answer, and any counterclaims, to August 5.
https://groups.yahoo.com/neo/g…ending_time_to_Answer.pdf

Quote from JedRothwell

I doubt the judge would allow any mention of cold fusion.

Right.

Rossi has been able to keep his fans going with the idea that Fabio Penon is a "nuclear engineer," and who are all these clowns to question the expertise of a "nuclear engineer"? Like the "independent professors" who impressed very few other than fans.

There are two major lines of defense.

1. No IP transfer, no deal.
2. The tests (Validation and Guaranteed Performance) were fraudulent or in error.

At this point I am most impressed by two possibilities in the second line of defense. One is something that Jed pointed out: that the IH expert was denied access to the customer area is highly suspicious, and would look that way to a jury. Further, if IH did do IR imaging of the building and if they, as I'd assume, prepared this as evidence if needed, this is also quite easy to understand, not complicated. No major heat leaving the building, no megawatt. Looking at the situation with lights for growing pot, a megawatt of power would be extraordinarily visible in the IR. Sifferkoll will not be allowed to testify with his vagueness about leaking through the roof, spread out. The whole roof would then be lit up! In fact, though, roofs insulate, all the heat would be coming out vents, at higher temperatures. The vents would be hot.

This is all easy to establish with testimony.

Then there could be issues with the ERV report itself. To a jury, though, that the same expert validated what IH could not later confirm, and the recent test, will, again, look suspicious. Rossi set up very difficult conditions for himself. If he had something real, it's obvious: he needed to keep his hands off it. Rossi doesn't do "hands off." It violates his identity.

I don't think IH will pull out the nuclear option: "after all, that much heat from a cold fusion reactor is impossible!" We know it isn't exactly impossible, just very, very unlikely, far beyond the state of the art.

My stand is that reality is always better than we imagine.

[quote='frankwtu','https://www.lenr-forum.com/forum/index.php/Thread/3536-IH-considering-counterclaims/?postID=30265#post30265']Wyttenbach

AR "members of the Jury - my expert, a nuclear physicist, says my invention works, here are his 4 reports all saying the same thing and here is a picture of Mr Darden after seeing one of them, he is very happy don't you think".

This is complete speculation on my part, but I believe reasonable none the less.

If IH brings a counter suit against Penon (third party) then AR will be in more trouble. I assume (perhaps Mr. Lomax could add here) that it would be hard pressed for Rossi to use Penon has his "Expert witness" if Penon was part of the counter suit. It is highly unlikely that Rossi would find anyone else that would testify in his behalf that would carry any weight.

So I believe it is possible that Frank's scenario will not happen. Penon may not even come back to the US if he has been advised not to by his lawyers. Rossi cannot stand in for Penon as his avatar! I am not sure what evidence from Penon could be entered into court if he is not personally there to provide deposition? What is the likely hood of him coming back to the US?

On the other hand, there is likely to be many experts willing to appear in support of IH, I am not so sure about for Rossi. Rossi cannot be the mouth piece for Penon, it will have to "come directly from the horse's mouth".

All the above is simply my assumptions and thoughts. I have no legal training nor expertise. It simply seems logical and likely with the limited experience I have had in a few court cases dealing with industrial liability.

Quote from Rends

lenr-forum.com/forum/index.php…-20140925152226-9375-pdf/

No judge will ever accept counterclaims (especially technical) if a professional investor like Thomas Darden is presenting his own product in this way.

Rends has no idea of what judges do.

What he has pointed to is a Chinese presentation on LENR -- a whole field, not a product! -- and as part of that presentation there is this statement: "A number of LENR technologies are demonstrating significant progress; one in particular may be ready for commercialization."

When did he give give that presentation?

Industrial Heat obviously made a decision in 2012 to treat the Rossi claims as real, and to give Rossi every opportunity to show them how to make his devices work. If Rossi cannot -- or would not -- do that, the technology is not "ready for commercialization." So that was then, when he was working on that possibility. Notice that Darden was talking about the whole field, not just Rossi. He also did that in 2015 at ICCF-19. Later that year -- or whenever the Fortune interview was -- he said that he wanted to "crush the tests." That means to make absolutely sure. Not vague. Not dependent on one person.

The judge accepted a preposterous claim from Rossi, because Rossi stated it in his Complaint, specifically that IH was a "wholly owned subsidiary of Cherokee Partners. Judges do not reject factual claims based on weak inferential arguments such as Rends presents here. The same standard will apply to counterclaims.

It is possible that the statement could be shown to a jury, but this statement is probably not admissible as evidence; however, Darden could be deposed on it. Nevertheless, on the fact of it, this is no confirmation of Darden's "product." And Darden didn't have a product and still does not, AFAIK. He is promoting research and may have some IP rights.

Rends may be thinking of inquisitorial law. That is not practiced in the U.S. See https://en.wikipedia.org/wiki/Inquisitorial_system. Some, reading the Order on the dismissal of certain counts and the continance of others, have though that the judge was ruing on fact. No. He was ruling only on the law, as applied to facts as alleged by the plaintiff. Those allegations were to be taken as true, unless controverted within the complaint and exhibits.

Apparently it may be possible for a defendant to ask the court to take "judicial notice" of facts not already a part of the record. That would have to be a very limited right, limited to what could not be controverted. Jones Day did not attempt to do this, at all. However, when there is more fact on record, some of that will not be controvertible, and I expect to see one or more Motions for Summary Judgment, particularly dismissing Cherokee Partners as a defendant. There may be others.

Quote from frankwtu

1. There was IP transfer, IH built the reactors for the one year test. There was no time constraints on IP transfer as this was an area of constant research, ongoing over time. This therefore was not a 'breach of contract'.

Reactors were built. Were they operable? Notice that the answer to that question is different from the certification of the ERV, which is about the GPT as managed by Rossi, a technical requirement for payment. "Operable reactors" would operate without Rossi there, and as assessed by independent experts. If IH were able to make such, then raising the $89 million would not have been difficult, they really demonstrated a much more difficult fundraising with the Woodford Investment, almost as much money, for something not immediately profitable, maybe never profitable. That ability to make reactors *that work independently* was fundamental to the purposes of the Agreement. It was not a Prize to be awarded to Rossi for a Successful Demonstration. This was ordinary business.

Quote

2. If fraudulent, as you yourself admit a very difficult position to prove (see my post above to Jed) if in error is the error 'material' and how can it be proven to be a reasonable cause for withholding $89 million when continuing IP transfer and development was part of the contract.

Rossi presented the 1 MW plant as a mature technology, transferable in written form. There were two parts to it: the instructions for making devices and the "catalyzer formula." Both were to be delivered to IH immediately upon the certification of the VT. Were these adequate to make devices that would pass independent testing? It appears not, unless Dewey has been lying, which I doubt.

Frank speculates that the difference might be the fuel. Possibly, but fraud is also a possible difference. In this case, to negate the 1 MW test, it would not be necessary to prove fraud, it would be enough to raise substantial doubt, my opinion. In any sane business relationship, if a test is called into question, there would be another test that addresses all the issues. Rossi has, however, always conducted himself to avoid that. This historical behavior could also be shown to a jury. However, it's looking like there may be evidence of fraud, from what Dewey has hinted. Rossi has generally conducted himself to avoid fraud allegations, he worked indirectly. It's a fascinating study. "Are you saying that the experts are wrong?"

Notice: if the problem is that the experts are wrong, then this is not fraud unless it can be proven that Rossi deliberately misled them. However ... did Rossi substitute a different flow meter? did he deliberately disallow IH expert access to the customer area? did he attempt to hide evidence regarding the flow meter? Was the "customer" a sham, wholly controlled by Rossi through his attorney -- who is also the President of Leonardo? Uh, isn't that just a *tad* suspicious?

Realize that suspicion could be enough to disallow concluding that the ERV report was binding. On Planet Rossi, it is thought that "proof" is required (and nonscientists often talk about proof, it's a red flag). No. Preponderance of the evidence.

I've been discussing much of this with a lawyer. There are countless details that we have not yet had time to address...

Quote

Not out of the question I grant you but very difficult to pursue and prove particularly to a Jury, always assuming they stay awake.

Oh, that can be managed. Honestly, what do people think someone like the lead IH attorney has done to gain his reputation and earning capacity? Rely on family connections?

These people will usually study the jury carefully, will notice what interests them and will craft presentations to appeal to the real jurors, as they are. They work in the real world, not some fantasy world where we might assume that people are eager to hear us explain the truth to them. And so we will go on and on. Right?

It takes skill. That's what they are paid so much for.

Don't forget that in general it is accepted that LENR works: Nobel laureate Brian Josephson is on the record that he’s certain the eCat is a nuclear fusion device and works as claimed. coldfusionnow.org/nobel-laurea…rms-support-for-e-cat-ht/[/quote]

This really weird, and a sign of not getting out enough. I have, since 2009, been arguing that LENR "turned a corner." It is more accepted now than it has been. There have always been scientists who accepted LENR or the possibility. I'd suggest that Brian Josephson be asked about his opinion now. I seem to recall him backtracking. I could ask him, but ... my guess is that he'd rather stay away from the Cat-fight. Brian was relying on misleading evidence that is no longer accepted by scientists in the field.

I discuss and explain LENR to general audiences, and especially on Quora.com. I would in no way say that "LENR has been accepted." The majority opinion among those with knowledge of physics is, I'd say, still quite negative. I wrote my 2015 paper to speak to those people, to interest them in the science of the field and the mystery of cold fusion.

Many of the scientists in the field are, in fact, still in despair of LENR ever being accepted until an entirely new generation has replaced the old. I think they are not correct about that. I think the time is ripe for a breaktrhough in perception. However, a lawsuit claiming fraud, back and forth, will that help?

The point here is that if the reality of LENR comes up as an issue -- that may not happen -- experts in nuclear physics brought before the court to testify are not likely to favor the possibility. And this would become an extremely complex case. I have not thought that we were ready to go back to the U.S. Deparatment of Energy. Close, but not quite. And the Rossi Affair was a distraction, because none of that was verifiable, it was all demonstration, not independent confirmation as it is understood in science.

So people would properly mention Rossi, from time to time, writing on LENR, but generally with caveats that his claims had not been confirmed.

Quote from Rends

ntrs.nasa.gov/archive/nasa/cas….nasa.gov/20140010088.pdf

Read this and have a look at Page 12 of PDF File:
Table 1. LENR parameters for devices in development.
Table 2. LENR projected parameters for 2025 and 2035

This is the actual situation and the midterm future projection of NASA.(NASA is the organisations that brought men into space and to the moon, landed and operates ROV devices on other planets and left the solar system and so on, but all these arguments are unlikely to help, because they are stupid and indeed all been cheated, and/or bought by Rossi! )

Ditto. It can easily be shown that various governmental agencies, from time to time, have investigated and invested funding in research. The issue in Rossi v. Darden, in fact, is not reality of "LENR" but twofold: did Rossi transfer IP and did the devices made by IH according to his instructions actually work when independently tested, or only when Rossi baby-sat them continuously. And only when the tests were analyzed by his chosen expert. If not, the IP transfer failed. And this could be shown in court, with sworn testimony. There an entirely distinct line of defense, which would be a claim of professional incompetence or fraud.

On Planet Rossi, every fact is quickly spun a certain way. So, for example, it will be pointed out that the Agreement provides for mutual choice of the ERV. And, indeed, it did. However, look at the context. At that point, when the expert was chosen for the Validation Test, Rossi could have walked away, it would have been trivial, the Agreement provided for it. The Agreement only became fully binding after the Validation Test. And then the Guaranteed performance test was set up to be analyzed *by the same ERV."

Consider this: the VT was done in Italy. Penon had already worked with Rossi before IH's involvement. Rossi chose Penon, I assume, I very much doubt that IH suggested him! IH accepted, because they had made a decision to set aside the fraud idea and work on assuming good faith. Then the GPT was to take place in the U.S. Penon was far from a natural choice! Why did Penon continue? I think it's fairly obvious, and will be obvious to a jury.

This case looks complicated to people who have a mind filled with cobwebs, generated by years of argument over Rossi, and particularly by defending Rossi against pseudoskeptical attack. As is not uncommon, when the conditions changed, some who had strongly defended Rossi continued as if nothing was different. However, to do that, the always-present element of conspiracy theory became more essential to maintaining belief and support.

In fact, many who had supported Rossi and the reality of his work now changed their positions.

The GPT ERV was the same as for the VT *unless* the parties agreed otherwise. Had IH not agreed to the ERV, when they could have objected, there would very possibly have been a cancelled Agreement and no way to determine if Rossi had real technology or not.

We will see how IH presents the situation, within a week.

Quote from frankwtu

And therein lies the courts dilemma, how to prove the existence of opinion as fact. The Jury will be instructed in law by the Judge who will explain the contract has an agreed definition of success upon which $89 million must be paid. That is the ERV report.

In fact, the contractual requirements require interpretation, and that is a question of fact. This has already been defended procedurally, with the issue of missing signatures and no allegation of written agreement to the GPT test. I do not know if IH will continue to pursue that, it is an issue of estoppel, which is, by the way, a factual determination, not a legal judgment. The judge, in ruling on the Motion to Dismiss, assumed estoppel as sufficiently alleged. But IH will probably have evidence to present on that issue.

Then there is the full nature of the Agreement. It is obvious that the Agreement set up a prima facie cause for payment. However, the Agreement as written might be considered unconscionable and therefore to be interpreted equitably. Notice that estoppel is a requirement for equity. The Agreement literally provided that the signature of all parties was necessary. So a literal interpretation: Rossi loses big. But contracts are not interpreted that way! There is equity, fairness, all that good stuff. On Planet Rossi, they want equity when it favors Rossi, and strict performance the same. Basically, if this was your money at stake, and you behave like this, you are likely to lose your money. The real world is not dominated by your thinking.

Quote

That stands unless it is successfully challenged which is possible but difficult. The only agreed test (agreed between Rossi and Darden et al) is the ERV report, any other tests and research will not be agreed contractually and will have little value, particularly because they will be easily challenged as biased and not based on the agreed contract.

This is a narrow argument that will not impress the jury. It is ridiculous to imagine that one could market a license, with hundreds of millions of dollars involved -- or more --, the contemplated business of IH, without the ability to have customers independently verify the technology. The jury will have no difficulty understanding this. If Rossi's attorney raises arguments like this, he'll look really bad, my opinion, unless he has high skill, and we have no particular reason to expect that. Realize that having four of eight counts shot down immediately with a Motion to Dismiss is not a sign of high competence in drafting complaints.

In his defense, he may simply have followed his client's instructions. Those complaints mirrored Rossi's general opinions about law and equity, his highly distorted world-view. Given a difficult situation, then, perhaps he did well. He is, after all, working for Rossi.

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No; the ERV report is the only contractual standard and that will be presented as 'fact'.

No. It's a "technical fact." However, then, there is equity, and a moment's thought in independence-space (a great place to hang out) would show that nobody would set up an agreement like this in the real world, where an $89 million payment is conditional on the opinion of a single expert, particularly if the expert is chosen by the one to be paid, and with no appeal and no recourse.

This was a Rossi invention, a device for getting paid without having to be subject to true independent testing. It is not going to look good.

On Planet Rossi, then, it is quickly said, "Then why did IH agree to this?" I have explained why over and over. Explaining this to a jury could be more difficult, but ... it can be managed. I think they will be fascinated.

I've been saying that the movie rights here could be worth more than the $89 million.