Update with IH Press Release Below
Rossi continues to surprise. Is he a genius destined to save the world, mentally ill or an old fraud with balls the size of a planet?
According to the complaint, Rossi did everything asked of him. A final payment of $89,000,000 should have followed publication of a report detailing a successful year-long run of a 1MW eCat. Rossi charges that Darden, Vaughn, IPH & Cherokee Investment Partners have:
“…meticulously and systematically defrauded ROSSI in an effort to misappropriate Plaintiffs’ intellectual property rights in the E-Cat IP.”
At last, through the suit, we get some meat on the bones of this saga. When reading the document, however, remember that we are ‘hearing’ the story according to Rossi without the counter argument from IH and Co. One might assume that certain asserted ‘facts’ are genuine or approximate truths. Thus we learn that:
The relationship leading to their agreement started in 2012,
IH was granted a licence for North, South and Central America, The Caribbean, China, Russia, Saudi Arabia and Arabian Emirates.
Total payment for the licence was to be $100,500,000 over three stages.
$1,500,000 was to be paid on execution of the agreement
$10,000,000 to be paid after successful completion of a 24 hour validation test by an ‘independent expert’ (termed expert responsible for validation or ERV)
$89,000,000 to be paid after successful completion of a 350 day performance test to be carried out by the ERV or another independent expert agreed by the parties.
Central to the suit is the license agreement. Rossi is suing on 8 counts.
The document detailing the suit should be read with reference to the agreement and not to our own judgement of Rossi’s character or to the worth of his eCat claims. In my inexpert opinion, filing for a trial by jury increases Rossi’s chance of winning irrespective of any future eCat success or failure.
By citing Cherokee as well as IH, IHP and the individuals involved, he is exposing them to potentially damaging publicity. The complexity of this case should not be underestimated. Like it or not, Rossi has credible scientists documented as backing his claims. He has multiple reports of apparent ‘independent’ tests conducted over extensive periods of time – all supporting the eCat’s performance claims. It appears that IH paid out the 1st and 2nd installments. It could be inferred that they were therefore happy with the results of the 24 hour test and recognised the ERV as qualified to conduct it. Otherwise, why would they pay the $10,000,000? Clearly, something happened between that point and now to spoil the water.
Rossi, it seems, has a healthy war chest. He is squaring up to serious money on the other side of the ring. In the centre is a quagmire of complexity where proof-of-eCat is subordinate to the letter of the law in relation to the details in the contract.
Is this a master-stroke by Rossi or a desperate move to head off a potential attack by multiple parties?
If this case makes it to court, it will be interesting to hear IH’s side of the story. However, I doubt Cherokee, Darden or Vaughn will welcome the damage such a messy scuffle will likely cause them – even if they win their case. Nothing can be taken for granted, including a quiet settlement in favour of Rossi and an information vacuum thereafter.
Few here would argue that they do not have a case. It is easy to attack Rossi and his many broken promises and he has his share of public documentation refuting his claims. A good example of this lies in the recent rejection of one of his US Patents. The following statement is quite damning and goes to the heart of the reality of this whole affair:
“The affidavit filed by the inventor on 12 Jun 2015 is acknowledged, however the arguments of the affidavit are not persuasive. Applicant avers that the two submitted papers demonstrate independent confirmation of the device operability. Examiner respectfully disagrees.”
It is worth reading the rejection in the context of the suit. Common sense might argue that Rossi has never provided truly independent proof of his claims. Even so, despite an army of scientists that would rightfully scoff at his assertions, few can lay claim to first-hand communion with an eCat and none to the extent that the Swedes, the ERV and other ‘experts’ in his circle can. The USPTO rejection helps IH should they defend themselves by claiming they do not think the test was independent but will that be enough? The USPTO offers no more than an opinion while Rossi has apparently substantive reports from those who – unlike the USPTO – have actually tested the thing.
IH et al have an uphill battle. It does not help that they were apparently happy with the ERV at stage 2, that they seem to have helped convince others to invest (Woodford?) or that they made public pronouncements supporting Rossi and claimed to have performed due diligence.
All of this points to a protracted and embarrassing court-case that could ultimately harm the business interests of those involved (including, indirectly, Woodford). Is there a line where such harm will cost far more than a few million to settle out of court?
Perhaps the defendants will surprise us and deliver a blow we have yet to see coming. At this point it is difficult to tell if this story is going to explode or fade to a whimper.
I look forward to reading your thoughts.
ETA – Please note that my position has not changed. I do not trust or believe Rossi has what he says. He has created a shield with the reputations of others and that will help his legal case. He may lose but it will not be the simple trial many sceptics believe should follow – particularly where a non-scientific jury is concerned. I observe this merely to wonder if the resultant reputational risk could be enough to induce an out of court settlement.
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Press release from Industrial Heat:
Industrial Heat Statement on Meritless Litigation from Leonardo Corporation and Andrea Rossi
15:15 ET from Industrial Heat, LLC
RESEARCH TRIANGLE, N.C., April 7, 2016 /PRNewswire/ — We are aware of the lawsuit filed by Andrea Rossi and Leonardo Corporation against Industrial Heat. Industrial Heat rejects the claims in the suit. They are without merit and we are prepared to vigorously defend ourselves against this action. Industrial Heat has worked for over three years to substantiate the results claimed by Mr. Rossi from the E-Cat technology – all without success. Leonardo Corporation and Mr. Rossi also have repeatedly breached their agreements. At the conclusion of these proceedings we are confident that the claims of Mr. Rossi and Leonardo Corporation will be rejected.
Industrial Heat continues to be focused on a scientifically rigorous approach that includes thorough, robust and accurate testing of promising LENR technologies. Our goal remains to deliver clean, safe and affordable energy.