Industrial Heat Amends Answer to Rossi’s Complaint on Aug 11th


  • Both "crazy" and "fraud" are used here loosely.


    THH has ""we can't imagine him acting like that if he had nothing". That is a version of "he'd have to be crazy," i.e., it doesn't fit our models of rational behavior.


    "Fraud or crazy" is about a specific dichotomy, i.e., there could be pure fraud. Under the pure fraud idea, he never had anything and it has been willful deception from the beginning. The problem with this idea is that to think he would get away with it, "he'd have to be crazy!" At the very least, we see serious social dysfunction, a lack of understanding or sympathy for how others would perceive what he was doing.


    His confidence in his email to Darden about the Hydro Fusion deception shows this. What impression did he think that would create? I explained this to a social worker this morning (we talk about a lot! An amazing woman.) She said what she would think if someone wrote that to her. She'd think "He cheated them, am I next? He lied to them, is he lying to me now?"


    Or the matter of choosing the ERV. The ERV is crucial to the major payments. So, instead of allowing Industrial Heat to pick an ERV, Rossi wants it to be his old friend, and there is a nice piece of business on JONP recently where he emphasizes how "reliable" Penon is, because of helping him with safety certification -- which was before the Validation Test. Would anyone socially sane think that would increase confidence?
    http://www.journal-of-nuclear-physics.com/?p=892&cpage=151#comment-1216786

    Quote

    About the test of one year of the 1 MW Plant, the measurements have been made for one year by a nuclear engineer, who got his doctorate in nuclear engineering when he was 23 years old in the University of Bologna with 110/110 summa cum laude, then worked as a nuclear engineer in a nuclear power plant, then, taking advantage of such experience, became a professional specialized in certifications and validations of industrial plants and industrial products. He has been chosen, as proven by copious documents, in agreement between IH and us to make the ERV and he made it with all his professional skills and with the integrity that characterized all his life, that is immaculate under any point of view, as I investigated when I knew him because I had to choose a trusted professional to make the safety certification of my products years ago; he resulted to be the best in absolute among all his colleagues for preparation, honesty, confidentiality. This is also the reason why he has been chosen to make the ERV, in agreement between IH and us. By the way, IH has totally agreed upon his report released after 3 months of test, and has cited such report in interviews released by Tom Darden. Same thing happened after 6 months of test, when the second quarterly report has been released by the ERV, same thing again happened after 9 months, when the ERV released the third quarterly report: please note that during 9 months of the test IH repeatedly accompanied to visit the test their investors, explaining to them how the ERV was measuring the performance, showing the seals of the flowmeter, showing the temperature measurement system ( agreed upon directly between Mr Tom Darden and the ERV) and IH collected many million dollars of investments from Woodford after the officers of Woodford visited the test twice, during the first 9 months, and repeatedly accompanied Chinese top level investors and engineers to visit the test. The results of the first three quarterly reports, obviously, were substantially equal to the results of the fourth and final report, that IH now is renegating. Eventually, IH paid the first three quarterly reports, but did not pay the final one. The first three reports determined the allowance to IH of enormous investments and they loved them. The fourth report determined the obligation of IH to pay us and they discovered the results were wrong: what a strange coincidence.


    Let's assume he is not simply lying through his teeth. I have no great difficulty considering that Rossi believes what he is saying. He has developed a story based his own interpretation of events. IH accepted his naming of Penon as ERV for the Validation test. He thinks of that as a joint choice. No, it was an acceptance, and Rossi had already shown, many times, that if things were not as he wanted, he walked away. If they wanted to find out if the technology was real, in spite of some obvious appearances, they chose to accept it, even though, apparently, in this case, they did protest, and Rossi refused to accommodate their concerns. Since they accepted that, he thinks that this was no problem. But it was a problem, and things like this accumulated.


    Penons issued reports to IH, but sometime around the first report, the IH engineer attempted to visit the plant, and this was refused -- for no apparent reason, other than the obvious, not wanting an independent engineer to see it. So IH had little basis on which to challenge the reports. How did Darden cite the first report? He might have said, somewhere, what it contained. Did, however, he *approve* of the report, and, more to the point, did he ever accept that this was from an ERV in an agreed-upon Guaranteed Performance Test?


    Rossi then clearly has an imagination about what was said to Woodford and the Chinese. Woodford's visit was early, I think. However, by this time, IH knew that devices they made per Rossi's instructions and guidance did not work. So, Woodford visits the Doral plant and sees the E-cat, very impressive, but with a steam line going out and into a Secret Customer Area, No Admittance. No way to get an immediate impression of real heat or not. "Heat" depends, in this situation, on the accuracy of instruments and of analysis. It can't be seen. It is not impossible that the problem with waste heat was known that far back. I have no special information, not yet, at least. So perhaps Darden shows Woodford the reactor then tells them privately -- and in writing, I would assume -- that they have no success at confirmation and they are allowing this power application to humor Rossi and, besides, this Customer is paying them $30,000 per month.


    So that they might continue the agreement and not blow the whistle makes $30,000 per month of sense. Sure, they were paying Fabiani $10,500 per month and something to Penon. But still it was a profit, probably.


    Rossi has no idea how real people think.

  • Rossi is more or less right in one way: they had no intention to pay him $89 million unless he actually taught them to make devices that worked, no matter what goofiness he arranged with the "GPT" and "ERV."


    IH likely had no intention of ever paying the $89 million irrespective of what happened after the second installment. Once they had the information from Rossi, there was absolutely zero incentive for them to pay, ever, whether they replicated "Rossi's" reactor, or not. That is Rossi's fault for failing to negotiate a better deal, and failing to insist that the $89 million be escrowed. But it also exposes character flaws on the part of those behind IH.


    IH are clearly not telling you the whole story. In every instance of their "never substantiated" misdirection, the language of which extends into the Answer (albeit in a more wordy fashion), they left an escape hatch. The escape hatch is that they have a high-COP reactor, that they feel is no longer "Rossi's" technology, because they themselves did something to improve it. Every time they project the message that the "Rossi" technology does not work, they have left this escape hatch. It takes the form of words such as unable to replicate technology "directly" received from Rossi, or unable to replicate "using" Rossi's technology, and so forth. The fact that they filed their own national and international patent applications, with a co-inventor of their own, underscores this sneaky position.


    And yes, they are sneaky. They word their messages in one way to misdirect the public into thinking one thing, while attempting to hide behind the curtain their true intentions. Their actions have the effect of damaging reputations of members of the LENR+ community, while they simultaneously pursue LENR+ for themselves. They have no love for the LENR (non LENR+ community). Whatever love you feel from them is a disingenuous.

  • @Shane D


    Your sympathies are condescending and unwelcome. I sit firmly on the fence, and with arms open to IH's positions as soon as they can demonstrate some straight up openness toward the LENR+ community. Enough with the games. Instead they feign LENR+ failure while throwing small lumps of money to LENR community members, all the while probably developing their own LENR+ solutions (and by the way, downplaying their already-known investment in another LENR+ player).

  • Once they had the information from Rossi, there was absolutely zero incentive for them to pay, ever, whether they replicated "Rossi's" reactor, or not.


    If they had replicated, it would be in their interests to pay him. It would be crazy not to pay him. Otherwise, eventually he will gain powerful allies, sue them, and win. He would have plenty of documentation showing that he is the discoverer. He would only need to find people more wealthy than I.H. to support him in a lawsuit, and he could easily take away everything they have, including the IP.


    Rossi's reactor produced no heat. That's all there is to it.

  • In every instance of their "never substantiated" misdirection


    You seem quite convinced of IH's misdirection. In this I think you are plainly mistaken, and that your mistake is evident to unbiased observers. I myself have seen no evidence of misdirection on IH's part. By contrast, I've seen plenty of evidence of misdirection on Rossi's part, having followed him over the years. Perhaps you will agree that there is plenty such evidence? Suppose for the sake of argument that both Rossi and IH have engaged in misdirection: why would we feel bad for Rossi in this scenario?


    What IH have done is to enter into a legal fight with daggers out. In this fight I hope they fight skillfully, for that money definitely would be better directed to recipients other than Rossi.


    Their actions have the effect of damaging reputations of members of the LENR+ community


    Here you are confusing a "LENR+" community (this is Peter Gluck's term) with people who believe that the E-Cat is real. LENR observers, and people who take LENR seriously, are a superset of people who give any credence to the E-Cat, who, I'm going to guess, are a vocal minority at this point.

  • If they had replicated, it would be in their interests to pay him.


    No, it wouldn't. If they had replicated, it would be in their interests to claim that they had not replicated (but stay as mum as possible on the fact that their own version works). And then not pay the $89 million, because there would be zero incentive to do so.



    It would be crazy not to pay him. Otherwise, eventually he will gain powerful allies, sue them, and win.


    It would be crazy for IH to pay him, even if they replicated, simply based on the terms of the contract. They got everything they wanted (and probably more) after the second installment. The terms of the deal were heavily weighted to IH. The $89 million was never intended to be paid, because they didn't need to.



    He would have plenty of documentation showing that he is the discoverer.



    And IH will have plenty of documentation showing that they are the discoverer of their improved version. In fact, they even recently amended the claims of one of their pending patent applications, placing it into better form for allowance.



    He would only need to find people more wealthy than I.H. to support him in a lawsuit, and he could easily take away everything they have, including the IP.


    I do not think you understand these matters very well.




    Rossi's reactor produced no heat. That's all there is to it.


    Yes, that is precisely IH's public storyline that they project loudly: that "Rossi's" reactor never produced heat. (Quiet sneaky escape hatch left in the language they use: their improved version does.)

  • I myself have seen no evidence of misdirection on IH's part.


    What do you make of IH recently amending the claims of one of their patent applications, which shows intention of seeing the application through to its conclusion? Is this improved version, where they name their own co-inventor, simply a ploy? They don't really have anything and aren't interested at all in maintaining that patent application?

  • It would be crazy for IH to pay him, even if they replicated, simply based on the terms of the contract.


    Contracts don't work that way. They are not a license to steal.


    And IH will have plenty of documentation showing that they are the discoverer of their improved version.


    That would not matter. Even if you invent an improved version of something, the original discoverer still has IP. If I.H. files a patent for an improved version, it has to cite the old patent, and the old patent holder automatically gets IP.


    I do not think you understand these matters very well.


    I am pretty sure I understand them better than you. I have little knowledge of the law, but lots of knowledge of business and IP.


    Yes, that is precisely IH's public storyline that they project loudly: that "Rossi's" reactor never produced heat. (Quiet sneaky escape hatch left in the language they use: their improved version does.)


    If it improved but still based on the old one, that is not an escape hatch. They owe as much as they did before. Improving something does not override or invalidate a patent. It builds on it. As I said before, Rossi could easily win that fight. He could show that they improved on his work, so they still owe him, and anyone who uses the I.H. patent would automatically owe him. An improvement would help him make more money.

  • That would not matter. Even if you invent an improved version of
    something, the original discoverer still has IP.


    Only if the original patent is a blocking patent. A design-around effort can avoid the elements of the claims in Rossi's granted patent. You can make an improvement and design around the previous claims.



    If I.H. files a patent
    for an improved version, it has to cite the old patent,


    Agreed.



    and the old patent holder automatically gets IP.


    No, that is not how it works. The old patent holder gets whatever IP is embodied in that patent. He does not automatically get any new IP.



    I am pretty sure I understand them better than you. I have little
    knowledge of the law, but lots of knowledge of business and IP.


    You are welcome to believe whatever you want.

  • No, that is not how it works. The old patent holder gets whatever IP is embodied in that patent. He does not automatically get any new IP.


    That is what I meant. Rossi still gets whatever IP is in the old patent. It is worth as much as it was before. If the new patent builds on it, it is the old plus the new.


    If they circumvent it, that is a different story.

  • If they circumvent it, that is a different story.


    The claims are what matter the most. Look at Rossi's granted claims. You can improve on Rossi's invention, designing around his claims, and file your own application with the improvement, even naming another inventor. Oh wait, that is what they did! And thus, they have never been able to replicate "Rossi's" tech, but they have their own, it works, and they will see it through to its completion.

  • What do you make of IH recently amending the claims of one of their patent applications, which shows intention of seeing the application through to its conclusion? Is this improved version, where they name their own co-inventor, simply a ploy? They don't really have anything and aren't interested at all in maintaining that patent application?


    Perhaps you are assuming one or more of the following things: (1) that IH, if they had significant doubts about the IP they purchased, would neglect it; (2) that IH are directing the minute by minute transactions of the handling of the IP by whatever firm this stuff has been outsourced to; (3) that IH, to have the legal position they have, must be of the opinion that Rossi has nothing; or (4) to file an amended claim you have to have proof positive that it works as described.


    I don't know whether you're making any of these assumptions, but I think all four are incorrect. IH may have significant doubts about the IP they purchased from Rossi but may not have thrown in the towel yet. The handling of the IP could be on cruise control for the foreseeable future, being managed by a law firm to which this has been subcontracted. IH may believe in the outside possibility that Rossi has something and just has not yet divulged it. And IH may wish to keep the patent up to date as a placeholder for the time when they really know how to make use of Rossi's IP.


    It is also possible that IH have figured out Rossi's secret sauce and now intend to throw him by the wayside. My intuition tells me this is not the case, but I could be wrong about that. That would be underhanded behavior.

  • Oh wait, that is what they did! And thus, they have never been able to replicate "Rossi's" tech, but they have their own, it works, and they will see it through to its completion.


    Assume that Rossi's technology works. Assume also that I.H. begins to make billions of dollars selling their version, and they manage to cut him out of the profits. What will happen next? Rossi will find powerful allies. He will demonstrate to them that his technology also works. He will finally do a definitive test -- something he should have done years ago. His new allies will take these test results to court, bash I.H., and take every penny from them. That outcome is inevitable. I.H. could not get away with cheating him once the the whole world knows the technology is real.


    This is not a quiet patent for improved window cleaning fluid that will languish in obscurity. If this is real, it will be on the front pages of every newspaper on earth for weeks. Every aspect of it will be covered. Rossi will be invited to address a joint session of Congress and he will be given a Nobel Prize. He will have power, and allies, and he will flatten I.H.


    I repeat: if I.H. thought this was real, and if their own tests had shown excess heat, or Rossi's 1 MW test had shown excess heat, I am sure they would pay the $89 million. It is a small sum of money by their standards. They paid $11 million without blinking. It would be well worth paying to avoid any legal problems in the future, after they start making billions. It would be a week's worth of profit. Why would they care about it? Why would they steal Rossi's technology when he has already given it to them, for a mere $89 million? (He gets to keep half the world's markets, so it is a good deal for him, too.)

  • Perhaps you are assuming one or more of the following things: (1) that IH, if they had significant doubts about the IP they purchased, would neglect it; (2) that IH are directing the minute by minute transactions of the handling of the IP by whatever firm this stuff has been outsourced to; or (3) that IH, to have the legal position they have, must be of the opinion that Rossi has nothing.


    I assume none of those, and still maintain my position. As to (1), it is the opposite: IH publicly and loudly claim that "Rossi's" tech has not been replicated. They have no control over Rossi's patent applications, and so therefore, cannot "neglect" them even if they wanted to. They only have control over the patent applications that they themselves filed. And so far, all indications are that they intend to see them to completion. As to (2), they are not directing the minute to minute transactions: But, patent lawyers do not, as a matter of good practice, submit formal claim amendments without prior instructions/authorization from their client. I'd be surprised if their lawyers took unilateral actions to amend the claims without any authorization to do so from IH. As to (3), all that matters is that they know that they have something, having "improved" on what Rossi gave them. And nothing in the contract would persuade them to part with $89 million when they already have what they wanted.



    I don't know whether you're making any of these assumptions, but I think all three are incorrect.


    I make none of those assumptions, think all three are incorrect, and still maintain my position.



    It is also possible that IH have figured out Rossi's secret sauce and now intend to throw him by the wayside. My intuition tells me this is not the case, but I could be wrong about that. That would be underhanded behavior.


    Why would they ever admit that the working version is Rossi's? When they can make some improvements and call it their own? Why can none of you discern the obvious here?

  • Why would they steal Rossi's technology when he has already given it to them, for a mere $89 million? (He gets to keep half the world's markets, so it is a good deal for him, too.)


    Because in their minds, they aren't stealing it. They made their own. And no, Rossi would not crush them in some hypothetical patent war. It is nearly impossible to get any LENR related patent applications allowed at the USPTO. IH understands this well. It is a gamble. And if maybe a few of Rossi's applications eventually get allowed, IH (and their associates) will mount a design-around effort. And if Rossi wanted to enter into a protracted patent war (with his so-far-one-issued-patent), he would likely get nowhere, but spend perhaps tens of millions of dollars, and risk having his patent invalidated by the courts. Look at the mobile phone patent wars. Dozens of patents and hundreds of millions of dollars. It is a game for kings.

  • As to (1), it is the opposite: IH publicly and loudly claim that "Rossi's" tech has not been replicated. They have no control over Rossi's patent applications, and so therefore, cannot "neglect" them even if they wanted to. They only have control over the patent applications that they themselves filed. And so far, all indications are that they intend to see them to completion.


    IH calmly state, in deadpan almost, that they have not been able to substantiate Rossi's claims. They have purchased Rossi's IP for 10.5 million dollars, and they have filed a patent with improvements they believe were made by one of their employees, adding his name as patent law both requests and requires. The courts will finally decide the matter, but in this I suspect they were 100 percent within their rights. What about their argument in the Answer in this connection is unclear?


    Why would they ever admit that the working version is Rossi's? When they can make some improvements and call it their own? Why can none of you discern the obvious here?


    You appear to be assuming from go that IH would not deal squarely with Rossi. You are clearly free to make this assumption, but it's very far from necessary. Why can you not seem to discern that you're making a voluntary assumption to this effect and then getting fired up at the implications?

  • they have filed a patent with improvements they believe were made by one of their employees, adding his name as patent law both requests and requires. The courts will finally decide the matter, but in this I suspect they were 100 percent within their rights.


    With this I agree. And it is also the reason that they would never, ever, depart with $89 million, because they did not need to. They out-maneuvered Rossi during the negotiation of the original contract, they knew it, and now they are exploiting it. These aren't boy scouts. They are hard-nosed businessmen.

  • With this I agree. And it is also the reason that they would never, ever, depart with $89 million, because they did not need to. They out-maneuvered Rossi during the negotiation of the original contract, they knew it, and now they are exploiting it. These aren't boy scouts. They are hard-nosed businessmen.


    If this is your position, then perhaps you also agree with me in suggesting that you appear to assume from go that IH would not deal squarely with Rossi. I assume very differently. I have the impression that IH bent over backwards to try to work with a party who was at first distrustful, and then before long started dealing in bad faith, when he wanted to wiggle out of the constraints of a contract he had signed after receiving 11.5 million dollars of other people's money without having delivered anything, and that he then used to turn around and sue them following the dog and pony show of a GPT. Under such circumstances, IH behaved stoically and did the best they could to manage a difficult situation.

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