Plaintiffs/Counter-Defendants’ Motion to Dismiss Defendants Amended Counterclaims against Plaintiffs and Memorandum of Law

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    Thanks Eric! Went through briefly. Rossi's defense is very weak, almost gobbly gook legalese, regarding the GPT, the "fake" customer...did not even address it head on, and some other areas I forget due a few, or so, adult beverages :) , but he was strong in defense of the patents.


    Overall, I was not impressed.


    Note: I used the word gobblygook 1 minute before Jed! :)

  • Not the strongest argument.


    "Even if Plaintiffs had not paid all appropriate taxes, they have, there is absolutely no legal basis for Defendants baseless and conclusory allegation that there is a “likelihood” that the E-Cat IP will be the subject of a tax lien."

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    I reviewed Rossi's request to dismiss IH's counterclaims again. Thanks again Eric for providing the link. My first impression from last night was pretty much correct. It sucked then, and still does now after further study. But I have gotten a little biased against Rossi, and maybe one of his remaining supporters might want to weigh in?


    Basically, in defense of his continuing product development (QuarkX I assume), and patent activity without IH's approval, Rossi makes the point that IH is only one of many licensees, and he has an obligation to all.Not just IH. Along those lines, he also addresses the tax issue. IH thinks he has not paid his taxes, which weakens their patent investment, due possible liens by the IRS. Rossi though seems to indicate he has paid by saying "they have" in this sentence: "Even if plaintiffs had not paid all appropriate taxes, they have," and goes on to say patents are not subject to liens anyways. In addition, it would be premature to claim harm, as no harm (lien) has been placed yet.Sounds pretty solid.


    In response to IH's claim that they could not duplicate the Ecat's promised performance, Rossi says that may be due to IH's: sabotaging so as not having to pay the $89 million, incompetence, substandard equipment, improper input/output measurement. As reason for his blaming IH for their lack of success, Rossi shows how IH admitted other third parties (Lugano) attained measurable heat. About what we here figured he would say.


    With the "fraudulent inducement/Deceptive and Unfair Trade Practices (fake customer)" Rossi presents a very, very weak argument. I thought it was gobblygook last night and still do now. Even a moron could see through their argument...which are technicalities, and not good ones at that. This was his opportunity to lay this to rest by saying there is a real customer, but instead made it clear he lied by inventing a fake customer. It is almost definite now that IH is right.


    My overall impression, is that Rossi's lawyer is trying heroically to get a weak case to a jury, where it might have a decent chance. If it goes that far, I can not see how a jury...as fickle as they can be, could swallow this. It is that bad. But you never know.

  • Leonardo's Motion to Dismiss IH's amended Answer, which was just added to the docket:


    drive.google.com/drive/folders/0BzKtdce19-wyb1RxOTF6c2NtZkk


    The file is "41 - Motion to dismiss - Leonardo.pdf".


    Thanks. Again I missed this because I was looking for 40 which I already knew could not be displayed, but I forgot to check 41. The URL given above does not show document 41 or the Motion, so I went ahead and downloaded it. $2.50. for a good cause, not having to wait for someone else! I'm tight on money, but not that tight.

  • The factual issues, such as the propriety of the customer, will not be dealt with in a motion to dismiss, as noted in the first footnote:


    Footnote:
    1 Defendants’ factual inaccuracies are not properly considered in a Motion to Dismiss therefore will not be discussed
    herein.


    As for the GPT:


    Main argument is that IH complained that the test of the plant did not "perform up to the standards set forth in the License Agreement" but at the same time pretends like the test is not the GPT as set forth in the License Agreement. So it is as if IH implicitly admits that the test was the GPT, but explicitly denies it (my interpretation of Leonardo/Rossi's argument).


    Count I:
    Standing: Rossi's argument is that IH transferred its rights to IPH, and therefore, lacks standing to assert a breach claim.
    Unable to replicate claim: ... "notwithstanding Defendants’ allegation they have been unable to 'generate measureable excess energy', they freely acknowledge that numerous third parties have been successful in generating an energy multiplier (COP) ranging from COP 2.6 to COP 10.85. (DE:30, ¶57, 58, 68)." So, basically, Rossi is saying that the claim that they were unable to replicate the tech is "self-serving conjecture" in light of the other acknowledgements. And I suppose that if it gets you out of having to pay $89 for something, then yes, might be self-serving.


    Count II:
    Standing: no standing for reason mentioned in Count I.
    Alleged "non-compete": Rossi's argument that the express language of the agreement is not a "non-compete" (and true enough, it isn't). Section 13.3 of the license agreement prohibits Leonardo from owning another competitor-company, not licensing technology to it. Rossi points to Exhibit D "List of Exclusive Commercial Licensees" as evidence that IH understood this well (the list covers licenses to other entities covering Norther Europe, Australasia, Africa, India, France, Benelux, Slovenia, Italia, Austria, Germany, Switzerland, Liechtenstein, Malta, Greece, the Balkans and Cyprus). Rossi refutes IH's position that they are entitled to prevent Rossi/Leonardo from continuing their work globally. IH's license was limited geographically.
    Failure to pay taxes: Rossi states that the taxes have been paid, and then pretty much smacks down the allegation that tax liens might attach (they wouldn't regardless).


    Count III:
    Fraud claim: main argument is that IH failed to meet the heightened pleading requirements for a fraud claim. Although the facts are disputed, these are not to be addressed in a motion to dismiss (see footnote above).
    Standing: no standing for previously stated reasons.


    Count IV:
    Unconscionable/unfair/deceptive acts and practices: Rossi is arguing that IH recast a breach of contract claim as a tort, which is not permitted under Florida law. Maybe not the strongest argument, but neither was the allegation.
    Backup argument: IH failed to meet heightened pleading requirement for a tort claim.


    There is my concise analysis. You will get the book version from Abd. ;)


    All in all, the arguments seem sound, but I'm sure there will be plenty of twists and turns. The fun really begins once we get into factual inquiries and analysis.

  • Some of us don't believe that IH wasn't capable of replicating.


    There was nothing to replicate. Rossi's own 1 year test was a failure. It produced no excess heat.


    Anyway "some of us" is not a useful argument. Some of us believe that NASA never landed on the moon. So what? Some of us have no evidence whatever for the notion that I.H. replicated. If I.H. had replicated they would have paid the $89 million and there would be no lawsuit.

  • Some of us believe man did land on the moon, and that IH likely replicated, or at least improved it slightly so that it would work (and then subsequently filed a patent application naming a co-inventor and took further actions to maintain acceptable claims in the application recently).

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    Mr.SS,


    I had hoped Rossi would defend himself in this MTD by stating IH had, in fact, replicated his tech. He did not though, and instead referred to the supposed third party results. Why, if he knew of, participated in, or seen IH replicate would he not mention it by now?


    Considering that he announced 8 July 2013 on his JONP that IH had built an Ecat from scratch, bought then mixed the fuel, started it, ran it and it performed as advertised, I kind of expected to see that, or something along those lines, reflected somewhere in his filings by now. But nope, he has not. Very odd if you ask me. That tells me IH was not successful, and Rossi is fully aware they were not...but could be wrong. Maybe as IHFB says, this is not the time for facts...although I find it strange that basic facts like this, and whether or not there is a real customer, at the heart of the allegations would not be known.

  • Some of us believe man did land on the moon, and that IH likely replicated, or at least improved it slightly so that it would work


    Uh, huh. Well, you may believe that, but you have zero evidence for it, and there is tons of evidence against it. Rossi's data makes it clear that he got no excess heat. The facts listed in I.H.'s Answer shows that Rossi and his company are frauds. Plus, as I said, if I.H. had replicated they would have paid $89 million and they would be rapidly improving the gadget now.


    People believe all kinds of nonsense without evidence, contrary to common sense. Just because you believe something that does not make it true.


    If you think the Answer is a lie, then apparently you think that billionaires would deliberately take steps to lose a lawsuit and $267 million, and that one of the best law firms in the country would go along with that for no apparent reason.

  • Technically IH didn't lie. And they most certainly don't think they lied in the answer. But my point stands. And there is evidence, as I included in my (admittedly terse) post. The primary evidence is the patent application where IH named their own co-inventor and their actions to maintain/improve the claims in the application recently. And it is good evidence, open and available to anyone.

  • And there is evidence, as I included in my (admittedly terse) post. The primary evidence is the patent application where IH named their own co-inventor and their actions to maintain/improve the claims in the application recently. And it is good evidence, open and available to anyone.


    No, a patent is not evidence for anything, nowadays. Many patents are filed based on speculation alone, and they often turn out to be wrong. Nowadays there is a rush to file for patent because the rules were changed to "first to file" so people file all kinds of nonsense.


    Those people at I.H. would not get themselves embroiled in a lawsuit for $267 million if they had evidence for excess heat. They are not fools. It is costing them lots of money, effort and time to defend against the lawsuit. If Rossi's device worked it would be worth billions and they would pay $89 million without hesitation. If they were willing to pay $11 million before, why would they not be willing to pay $89 million now? That makes no sense. It would cost them billions to develop the thing into a practical source of energy, so the $89 million would be only a minor expense. If they do not pay now, and they go ahead and develop the thing into a practical source of energy, they will surely be forced to pay eventually, with a large penalty attached. Once they start licensing or selling a practical device that would make it an open and shut case. At that point, Rossi could sue them for $300 million or $3 billion for that matter, and easily win.

  • If Rossi's device worked it would be worth billions and they would pay $89 million without hesitation.


    No they wouldn't. No inducement = IH didn't pay the $89 million. The didn't have to.



    If they were willing to pay $11 million before, why would they not be willing to pay $89 million now?


    Because they were induced to pay the $11 million.



    It would cost them billions to develop the thing into a practical source of energy, so the $89 million would be only a minor expense.


    $89 million: a minor expense for a risky startup with all kinds of regulatory uncertainty. Ah uh.



    If they do not pay now, and they go ahead and develop the thing into a practical source of energy, they will surely be forced to pay eventually, with a large penalty attached.


    Not necessarily. And this is the calculus. They improved it (presumably designing-around Rossi's claims). They own the improvement.



    Once they start licensing or selling a practical device that would make it an open and shut case.


    No, because see above.



    At that point, Rossi could sue them for $300 million or $3 billion for that matter, and easily win.


    I suggest you bone up on these matters a bit more.

  • Not necessarily. And this is the calculus. They improved it (presumably designing-around Rossi's claims). They own the improvement.


    Patents do not work that way. They -- along with everyone else -- would have to pay royalties to Rossi even if they sold the improved version. More to the point, Rossi could show that they reneged on their promise to pay him the 89 million, and the reason they gave for that was false. He could show that it actually worked after all, and I.H. was lying. The whole world would see that. Anyone could win at trial with that kind of evidence. Rossi could easily win $267 million (a 3 X penalty).

  • Patents do not work that way. They -- along with everyone else -- would have to pay royalties to Rossi even if they sold the improved version.


    Deja vu!!! Blocking patents--YES! Patented claims for which the claims have been designed-around--NO! I am suggesting the latter, not the former.



    More to the point, Rossi could show that they reneged on their promise to pay him the 89 million, and the reason they gave for that was false. He could show that it actually worked after all, and I.H. was lying. The whole world would see that. Anyone could win at trial with that kind of evidence. Rossi could easily win $267 million (a 3 X penalty).


    There is nothing easy about litigation, even if the facts are on your side. But, I generally agree that if it actually works, it will come out during the litigation/trial.