Citywire on Woodford and Rossi v. Darden

http://citywire.co.uk/money/woodford-tech-holding-settles-battle-with-scientist/a1045121

Citywire qualifies, I think, as “main stream media.” Stories on cold fusion in this kind of media tend to be totally shallow and poorly researched. This is certainly not the worst I’ve seen! Some of what I write below may be nit-picking, minor quibbles, but … some of it isn’t. My purpose in creating this page is actually to hold responses to the public comments on the Citywire story.


An energy technology company backed by fund manager Neil Woodford has settled a legal battle with a scientist who claimed he was owed $89 million (£69 million) for the use of his invention.

The company that Woodford backed was not sued by the “scientist,” who is not a scientist, rather. Andrea Rossi, an Italian inventor and entrepreneur, sued Thomas Darden, John T. Vaughn, Industrial Heat, LLC, IPH International B.V. (an IP holding company wholly-owned by IH), and Cherokee Limited Partners. IH was a party to the original License Agreement with Rossi, and IPH was added by amendment. The others were an attempt by Rossi to pierce the corporate veil, claiming fraud, and Cherokee Limited Partners was included on a Rossi claim he’d been led to believe that Cherokee would cover any failures to pay. This made no legal sense, but did survive to trial because Stuff Happens.

The Rossi claim was not for “use of the invention.” It was for an alleged failure to pay an additional fee, $89 million, as allegedly triggered by the Agreement, for an alleged successful test.

Scientist Andrea Rossi, who claims to have invented a ‘low energy nuclear device’ alleged Industrial Heat, held by Woodford’s Woodford Equity Income fund and Woodford Patient Capital (WPCT) investment trust, had ‘systematically defrauded’ his intellectual property rights to the energy catalyser, or E-Cat.

Industrial Heat is owned entirely by IH Holdings International, Ltd. Technically, Woodford does not “hold” either IH or IHHI. Rather, Woodford owns preferred stock in IHHI. Control of IHHI is not under Woodford control, it is with the original investors. By the time Woodford supported IHHI by investing, IH was probably out of money. Woodford is then the largest investor (by roughly $50 million vs $20 million), but this actually had almost nothing to do with Rossi, who sued the original company and its officers and the kitchen sink. But who could not touch IHHI.

E-Cat technology has been shunned by the scientific mainstream but claims to be able to generate energy at more moderate conditions than the high temperatures required for other forms of nuclear fusion.

This confuses the field of LENR (low-energy nuclear reactions) with a particular claimant. The “mainstream” is not well-defined. LENR is considered “fringe science,” or “emerging science,” the reality of LENR effects is generally considered controversial, but investment has been increasing. Woodford invested $50 million making them the largest recent investment. What could be called “mainstream acceptance” of “E-Cat technology” has been rare. Most scientists involved with LENR did not accept Rossi’s claims. However, some did.

The mechanism behind LENR is unknown, though there are various theories. It is popularly called “cold fusion,” but it is not known if the term “fusion” is accurate. There have been claims of independent scientific verification of Rossi’s claims, but these were found, by Industrial Heat, as well as others, to be defective. There are persistent reports of anomalous energy generation, but at levels far lower than Rossi’s claims.

A “technology” does not make a claim, people do.

Rossi’s claim against Industrial Heat reached the Florida courts, but the two parties reached a settlement a week into the case.

After more than a year of legal wrangling. The settlement, July 5, 2017, was abrupt and unexpected. It appears to have arisen that morning in court, after the jury had been chosen and the parties had given, July 10, opening statements. A new lawyer for the plaintiff asked permission of the court to have a few words with the defendant’s lead attorney. And then it all unfolded. It appears that Rossi had decided to settle and let go of his claims, and his attorney was able to negotiate the return of the License (which then allowed him to save face, claiming, on Lewan’s blog, that this was all he wanted in the first place. My guess is that what he wanted could have been obtained by ordinary negotiation a year earlier without spending what may have been $5 million in legal fees on both sides (estimates of the fees have varied widely, but this was obviously very expensive).

It is unclear what was actually agreed July 5, but some time later the document appeared on Mats Lewan’s blog, almost certainly supplied by Andrea Rossi. At that point, the information I have is that the document had not yet been signed by all the parties, so the terms were not necessarily final. The lawsuit and countersuit, however, were dismissed with prejudice July 5, in court. Later, there was confirmation of the Agreement; eventually, the last remaining party signed the Agreement.

Technology and science writer Mats Lewan, author of An Impossible Invention chronicling Rossi’s work, published what he claimed were the terms of the settlement, with Rossi receiving the license to the E-Cat.

This is correct. That is, the License was returned to him, and, as well, all embodiments of the technology, whether built by Rossi and sold to IH, or built by IH.

Rossi had claimed before the court hearings that Industrial Heat’s claim to the intellectual property had been crucial to its fundraising from Woodford Investment Management and others.

Which was probably deceptive and misleading. Woodford did not invest in IH, and there is no sign that Woodford was impressed by Rossi technology. It is more likely that Woodford was impressed by IH’s willingness to take the risk they did. No evidence appeared in pleadings that Woodford relied on Rossi claims, but the License may have served as a hedge against a possible Rossi surprise, because Woodford investments were actually targeted to other LENR technologies and research (including theory development).

Woodford’s small stake in Industrial Heat has been one of his worst performing holdings.

As completely expected. There was no expectation of any performance, this was all long-term establishment of position. With the Rossi technology not confirmed by Industrial Heat testing, it was worthless, and very little other LENR research or development appears to have short-term profit possibilities. Nobody has a clearly successful product to promote. That is, and was surely known to be, the nature of the field at this time.

There is real science involved, as can be seen in the publication record in scientific journals, and many published reviews. The idea that this is uniformly rejected (“shunned”) is old and quite obsolete; but it persists and if people believe the field is shunned, to that extent it is, even though substantial publication has continued and official reviews have unanimously recommended further research (with opinion being divided on the reality of the effect, evenly divided in the last major review, by the U.S. Department of Energy in 2004).

Over the 12 months to the end of June, only Allied Minds (ALML +
), 4D Pharma (DDDD +
) and fellow unquoted stock Kind Consumer have been a bigger drag on performance in the Patient Capital trust. Industrial Heat accounts for around 1.3% of the portfolio.

Then it is a 1.3% that is devoted to a serious blue-sky possibilities, work that might lose money for decades, but that, if successful, could be worth a trillion dollars (i.e., since I may have some Brit readers, a thousand thousand million).

The stock accounts for a much smaller proportion of the Equity income fund, at just over 0.1%, but still ranks among the 20 biggest weights on the fund over the 12 months to the end of June.

I am not sure how the investment was valued, but IHHI has no profits and is not expected to; it may have some license rights, which may be carried on the books as assets, even if return is unlikely. It now, with the Settlement Agreement, may write this off entirely, producing tax benefits for shareholders, as they have pass-through profit and loss, if I’m correct.

Woodford Investment Management declined to comment, but has previously said it shared Industrial Heat’s ‘quest to eliminate pollution’ through its ‘diverse portfolio of innovative technology, such as low energy nuclear reactions’.

That’s what they say, all right. However, they have never claimed to have an actually performing LENR technology, and only, at times, hopes of such. At this point they have perhaps six technologies that remain for consideration as possible.

I would not suggest to anyone to invest in LENR who is looking for profit in their lifetime, unless maybe they are young and, as well, risk-tolerant. This is a long shot; I personally expect commercial application of LENR to eventually be successful, but it could take a very long time. We still don’t know what is actually happening with the known effects, other than results (the original effect, with palladium deuteride, produces energy and helium correlated at a ratio that indicates some kind of fusion is taking place. That’s widely confirmed, and there is current work to increase precision on that, I expect to see publication soon.

Now, as expected, there have been comments. The site does not allow threaded comments. I posted there yesterday and I’ve been asked at least one question. I’ve decided to answer comments here, posting only a link there, assuming it’s approved, to the comment section of this page, here, and anyone may continue the conversation here, through our open comments, if they choose.

Comments on Citywire

List of comments (apparent threading added)

PaulSh Aug 30, 2017 at 16:41
==Mary Yugo Sep 06, 2017 at 19:40
General Zod Aug 30, 2017 at 17:39
RKB Aug 30, 2017 at 18:32
== Tyrion Lannister Aug 30, 2017 at 19:28
=== PaulSh Aug 31, 2017 at 10:34
Abd ul-Rahman Lomax Aug 31, 2017 at 13:05
== PaulSh Aug 31, 2017 at 15:09
=== Tyrion Lannister Aug 31, 2017 at 16:27
Mary Yugo Aug 31, 2017 at 18:54
== RKB Aug 31, 2017 at 19:24
Abd ul-Rahman Lomax Sep 01, 2017 at 01:26<
Capt Ahab: 11:27 on 02 September 2017/a>
Mary Yugo Sep 05, 2017 at 22:26

 

PaulSh Aug 30, 2017 at 16:41

The way I read both the linked blog and the actual settlement, Industrial Heat is finished. To say that Rossi is “receiving the license to the E-Cat” is a bit of an understatement because he is actually having the licence returned to him along with all existing hardware and IP – in other words, IH will have nothing.

This assumes that Industrial heat was only interested in Rossi. If Paul would read the rest of that blog, he would see that when Woodford invested $50 million in IHHI, effectively into the control of the original IH investors, and they invested this in his “competitors,” Rossi decided he could not trust them.

(Even though the License allowed them to sublicence and did not restrict them from disclosing the IP.)

However, by this time, they already knew that they could not make his technology work with independent testing. While the License had a possible value as a hedge, they didn’t need the hardware, which the alleged test actually showed was, at best, not ready for commercialization, so they were moving on already. Other than legal expenses, they had put about $20 million into Rossi, but they have already put substantially more than that into other technologies. So they are hardly “finished.” They are continuing to work with researchers and have developed broad connections with the research community, and they are generally trusted in the field. Nobody who matters believes Rossi’s story of IH defrauding him.

There is a remaining possibility, if Rossi ever does actually pull a rabbit out of the hat. Ampenergo was the prior owner of the Rossi license for the Americas, and IH gave them something like $5 million plus stock for those rights. Ampenergo was a party to the License Agreement and still has rights, and the new agreement between Industrial Heat and Rossi could not affect those, and Ampenergo is still responsible to IH for what they separately agreed. So if the Rossi License ever does happen to develop value, IH might still have a line on it. They do not expect this, but these people work with hedges when possible.

[…]

RKB Aug 30, 2017 at 18:32

Cunning. The investors in IH lose, presumably the promoters have taken fees, the device never gets exposed as a fraud, and Rossi is free to licence to another startup. Rinse and repeat.

There are no promoters taking fees. The “investors in IH” were a close group of highly experienced investors, and Thomas Darden was the largest investor, spending his own money. The court documents expose that Rossi fraud is very likely.

IH, I am sure, researched everything they could find about Rossi before investing in the possibility with him. Nothing like that new court record existed for them to see. For Rossi to find new investors is now far more difficult. By standing up to the Rossi suit, they made the world far safer for people willing to invest in risky technology; Rossi will be off the table for almost all of these.

Tyrion Lannister Aug 30, 2017 at 19:28

What really worries me is that Woodford fell for it.

In effect, Industrial Heat claimed to have harnessed cold fusion. Anybody who knows anything significant about science will tell you this exists only in the realms of fantasy.

Without a definition, “cold fusion” exists as a fantasy, and much that Tyrion says here is fantasy. Industrial Heat did not “claim to have harnessed cold fusion.” What is variously called the Fleischmann-Pons Heat Effect, or the Anomalous Heat Effect, was originally called “cold fusion” in the media, even though Fleischmann and Pons were explicit that what they had found was an “unknown nuclear reaction,” and they only speculated that it might be fusion. Later research has developed that they were, in round outlines, correct, because helium is being produced from deuterium — by the preponderance of the evidence, confirmed. However, nobody has shown that the effect is “harnessed.” That claim was Rossi’s, and he usually did not claim it was “cold fusion.” He was quite evasive and still is.

I would put this differently: at this point, “harnessing cold fusion” is very much beyond the state of the art. There are protocols that may generate a few hundred milliwatts in most attempts, and work is under way to improve reliability and develop better control of conditions. Rossi’s claims were far outside the envelope. Most scientists involved with the field were suspicious, but a few theorists adapted their theories to possibly explain Rossi’s results. There were a few scientists who were incautious enough to report positively on his work; scientists are not necessarily trained to recognize fraud and deception. This was very different from the situation with “cold fusion,” where there is credible work published and under way, justifying further research. There are a few companies with commercial projects, claiming some level of success. Again, far less than what Rossi was claiming.

Woodford knew what they were doing and did not generally invest in “claims of harnessing cold fusion.” Woodford did not invest in Rossi at all.

PaulSh Aug 31, 2017 at 10:34

@Tyrion Lannister, much as I have often scoffed at “cold fusion” and other dubious branches of pseudo-science, it has to be said that anybody who knows anything significant about science should also tell you that we don’t know everything there is to be known. So it’s a question of getting the balance right between, as one NASA scientist once put it, being so open-minded your brains fall out, and being so closed-minded you end up missing out on great opportunities.

The field popularly called “cold fusion,” more soberly called “condensed matter nuclear science,” with a subfield being “low energy nuclear reactions,” is not pseudoscience, even if one thinks it dubious. Real experimental work is being done, by experienced researchers and scientists, for exploration to develop hypotheses and to test them, and even real physicists are working on possible theory. There are sometimes people too eager to accept what pleases them, and people very reluctant to look at their own assumptions, but from the beginning in 1989, those who actually understand science have supported investigating the possibilities of “cold fusion.” (Pseudoscience is unverifiable, claims of LENR are generally verifiable or multiply confirmed, it can be a complex issue. Claims of impossibility are well-known to be pseudoscientific, in fact. They cannot be proven, because absence of evidence is not evidence of absence. And there is evidence, merely controversial evidence, in many cases.

There are many common memes about cold fusion that are directly contrary to easily verifiable fact, such as the claim that the Pons and Fleischmann reports “could never be confirmed.” That claim is actually preposterous. Pons and Fleischmann did make mistakes, but their central report — anomalous heat — was never found to be wrong, and many others found it, once the conditions became better understood. Famous early “negative replications” actually confirm later understanding, i.e., the conditions set up in those experiments are now known to certainly fail to see the effect.

In this particular case, Industrial Heat was a huge gamble that you might have put a little of your own money into in the hope of winning big, just as you might buy a lottery ticket, but there’s no way you should have been putting other people’s money into it.

That depends. One would ethically not put “other people’s money” into it without those investors being aware of the risks. If a fund invests without due diligence and disclosure, the fund manager could be held liable for losses. Investment may look like gambling, but is not, because it is not a zero-sum game. Darden of Industrial Heat testified that they considered that if there was 1% chance of Rossi technology actually being commercial or commercializable, it was worth their investment. As another wrote, “Do the math.” What is the value of LENR technology? What are the odds of success? To answer those questions takes some research. My estimate of the potential value is generally about a trillion dollars (i.e., 10^12). 1% of a trillion dollars is $10 billion. Allow for the likelihood that there will be competition and other market factors, and still $20 million is chicken feed.

If you have it to risk.

Make bets like this frequently, and if you choose well, you are likely to win, overall. Suppose you make a hundred bets like this, your cost will be $2 billion. Nobody is going to do this alone, I’m sure. It has to be, in some sense, “other people’s money.” Darden has built a $2.2 billion company, Cherokee Investment Partners, by making risky investments in environmental remediation. Many of these investments fail, and when they fail, Cherokee tends to lose up to $25 million, their typical investment. Stupid? Stupid all the way to the bank. When these investments win, they may result in profits in the hundreds of millions.

Abd ul-Rahman Lomax Aug 31, 2017 at 13:05

There is full coverage of the lawsuit, all documents and links to analysis, at http://coldfusioncommunity.net/rossi-v-darden-docket-and-case-files/

I followed the case from filing to settlement. I travelled to Miami and attended the trial (Except for one person, one day, I was the only media there.) Many will comment on this case without knowledge, this is the internet.

My brief summary: Industrial Heat invested $20 million of their own money (a small group of investors who know each other well) on a long shot. Darden said in a deposition that, if there was 1% chance of Rossi technology being real, it was worth the investment, and, coming from their interest in environmental remediation and protection, their goal was the field of Low Energy Nuclear Reactions (LENR), not Rossi himself. They needed to know.

They found out, and by the time Woodford invested, (having committed up to $200 million, so the Woodford $50 million was just the first tranche), whatever has been spent of the Woodford money went entirely into other investigations and was beyond his reach, since Woodford did not invest in Industrial Heat, a United States LLC, but in IH Holdings International, Ltd, a U.K. corporation.

This was known to be very risky, with expectations that failing to find a commercial-scale application with only $50 million was likely. They did due diligence and know that LENR is real, but very difficult to control, due to severe problems with material conditions, with theoretical understanding still being in a primitive stage. Rossi’s claims were damaging the field, because who wants to invest in scientific research claiming a few watts, when Rossi was claiming kilowatts? — and there were some scientists supporting the claim (especially a group from Uppsala University in Sweden)..

To read Rossi’s account to Mats Lewan, when Rossi found out about the $50 million going to his “competitors,” he decided he could not trust them, and all relations were hostile from then on, and eventually he sued them (which made no business sense). IH settled for a return of the License and his reactor junk, worthless to them, but allowing Rossi to continue to claim that his technology worked. (Someone who wants to continue believing this is forced to conclude that Darden and others lied under oath, or, alternatively, that Ross never trusted them with the secrets, in spite of being paid for them. Paranoia strikes deep. Even Rossi’s friends consider him paranoid and very difficult to deal with.)

As to the public interest (which they are not obligated to protect), the roughly $5 million that they are said to have spent on legal fees has allowed the public to know what happened, through case documents, clear evidence that would have been introduced in the trial if it had actually entered the evidentiary phase, filed with pleadings and attested., Future possible investors can see how Rossi treated what appears in the documents, with Rossi aggressively pursuing in discovery every bit of apparent dirt he could find, as an angel investor.

Woodford did not invest in Rossi. A small portion of Woodford funds may have been used to help pay legal expenses (IHHI became the sole owner of IH, through stock swaps). The Woodford investment was, and remains, extremely risky. It could take billions of dollars to develop LENR, but, through Industrial Heat, Woodford will have his finger on the pulse of the field and will know when it is appropriate to invest more. They bought, actually IH created, expertise. This could take twenty years to pay off. There is a small possibility that LENR will remain, forever, a lab curiosity, but … my sense is that this is unlikely. What is unclear is what and how long it will take.

Well, I intended to be brief, I see I failed! However, this was just a comment on a news story, and not worth sweating over.

PaulSh Aug 31, 2017 at 15:09

Dear Mr. Lomax, thank you for that “brief” summary. Would I therefore be correct in saying your position is that Rossi’s work proved to be a dead end but IH itself is far from dead even though Rossi has taken back everything apart from their “expertise”?

Yes, Rossi’s work adequately proved to be a dead end. If he has a real technology, he did not deliver it as promised, and his “1 MW plant,” if it had actually worked, would have cooked everyone in that warehouse. And then Rossi has a story to explain that away, a story that changed over the year that the issue was pending. He’s almost certainly lying.

IH is far from “dead” because they were much larger than Rossi. Consider that their original investment went to Rossi or to support validation and confirmation attempts, and that was apparently from a $20 million stock sale (to the small group). Then they received the $50 million from Woodford and the bulk of that has been spent on other approaches. This is all about gaining knowledge and experience. Rossi can’t possibly take that back. Rossi had physical possession of the 1 MW Plant that they had padlocked. He was offering to drop the lawsuit if they surrendered the License. Instead of arguing that they paid $10 million for the License — Rossi did claim elsewhere that he had offered to refund their money (all $11.5 million they had paid him) if they surrendered the license, but from what happened later, I doubt it. He was almost certainly lying about that as he lied about many things where we later found out the truth — they decided to walk away. Rossi had no technology worth fighting over. They might have obtained some recovery from their counterclaims, but … it was not necessarily going to recover their legal costs and there were risks. So, then, what about the Plant that they had paid $1.5 million for in 2012? It was useless to them. Remember, they have already thoroughly tested the technology and their analysis of performance in Doral, Florida, was that it wasn’t performing at anything like what was being claimed, units were failing, it was a mess. What would they do with it? Far easier to just give it all back.

They always claimed that their goal was to make Rossi successful. Okay, so he’s too paranoid to work with. Suing him for recovery could spook their basic “customers,” i.e., the inventors they want to work with. I think that, that Wednesday morning in Miami, they took the opportunity to just leave it behind. They had already gained, in a way, an additional $50 million for research to compensate for the $20 million they were walking away from. I spoke with Darden after the settlement came down, and he was “philosophical.”

Remember, this was largely his money. Now, Woodford has invested, in something just as risky, general LENR research, “other people’s money.” But he is not betting anyone’s far on this, it is a tiny part of the porfolio. He could make many investments that are “blue sky,” and if his judgment is sound, his assesment of risk and possible benefit, this could make total business sense, as long as no investors are misled.

Tyrion LannisterAug 31, 2017 at 16:27

PaulSh,

It’s down to maths and physics, and the maths prove it isn’t possible. The activation energy required is colossal. You simply can’t get energy for free which is what would be required for cold fusion to work.

If some told you they could break the speed of light, would you keep an open mind on that?

This is utter nonsense. The energy in the Anomalous Heat Effect is through an unknown mechanism, but the source is known, it is, with high probability, the conversion of deuterium to helium. That implies, but is not necessarily, “fusion.” Fusion ordinarily involves the fusing particles to move beyond a charge-repulsion barrier, and one way to do that is for them to have high kinetic energy. That energy is normally found at high temperatures. However, that is not the only path to fusion. Also called “cold fusion” when discovered and shown to exist, muon-catalyzed fusion bypasses the coulomb barrier by using muons to shield that repulsion. Most theories of “cold fusion” involve some other kind of catalysis. Most fusion, in fact, even with “hot fusion” occurs by tunneling, which is a quantum-mechanical effect that allows moving to the other side of a barrier without actually going over it.

There is no known impossibility to “cold fusion,” but it was unexpected. Pons and Fleischmann were not looking for free energy, they were looking to test the assumptions of plasma physics as applied to the solid state, where the interactions of particles may be far more complex. They actually expected to find nothing (because they thought the approximations were good enough, but they had decided to look. That’s science.) Then their experiment melted down, releasing more energy than they could explain with chemistry, and they were world-class electrochemists. They waited five years to announce and still were not ready. It became a colossal mess, as many rushed to confirm without adequate information and Pons and Fleischmann themselves did not understand aspects of their work. We know far more now, thanks to the work that did continue.

The opinions expressed here are common, though, because the field is extremely complex and many people decided, years ago, to wait for some killer demonstration. Some people thought that might be Rossi. It wasn’t.

Mary Yugo Aug 31, 2017 at 18:54

It seems as if a post in which I attempted to draw attention to Rossi’s past may have been censored. So I will leave it to this link:

http://newenergytimes.com/v2/sr/RossiECat/Rossis-Italian-Financial-and-Environmental-Criminal-History.shtml

I also commented on the quality of Woodford’s vetting of Rossi and IH. That didn’t make it through either.

Ah, Mary Yugo. For those who don’t know the history, for sure, it is informative, though Krivit is a yellow journalist and commonly tells only one side of a story. Be that as it may, all this was known to IH and to Woodford. “Mary” commonly expresses regret that IH didn’t pay attention to him! They could have saved $11.5 million? What idiots they are!

From a comment by Dewey Weaver, an investor in IH and a contractor to them, who tangled with Rossi immediately (he tells the story that he pulled out a heat gun to confirm temperatures Rossi was reporting in a demo, Rossi yelled “Everyone out of the room, it’s about to explode!” and then told T. Barker Dameron, who was at that point managing IH attempts to confirm Rossi, to “Get that lawyer out of here!” (Weaver is not a lawyer, as far as I know.)

MY – as intimated before, TD had a hunch that the splash from engaging / funding Rossi would lead to other opportunity whether R was real or not. A combination of huge vision and gigantic nerve/skill.

The sector had been resource starved for almost 2 decades and very good dedicated folks had managed to stay in active research sometimes at great sacrifice to themselves – these folks turned out to be excellent people beyond their research capabilities which makes this fun on top of rewarding. I’m greater than 50/50 now that his hunch is going to end up working out. (not much greater but confidence is growing – still a long way to go).

Weaver was responding to Mary Yugo, who is like a Timex watch with a broken set knob, “Takes a licking and keeps on ticking.” Mary belabors the obvious as if nobody else can see it. Darden, as described by Weaver, was right. The IH investment actually paid off, turning $20 million invested in Industrial Heat into $50 million and probably more invested in IHHI, for LENR research, demonstrating “vision and nerve/skill,” and that is what Woodford invested in. Not Rossi.

If someone does develop a practical device, they will know about it and will be ready for investment opportunities. Nobody else is likely to pull off the Rossi tricks. Everything is being carefully tested. Mostly, though, we will not, as the public, learn about this, because it would almost all be under non-disclosure agreements. Even the straight scientific research in the field is normally cautious about publicity.

RKB Aug 31, 2017 at 19:24

Rather ironic when you consider Woodford, from his Cowley base, is just a few miles away from JET at Culham, as well as Harwell and the University. He didn’t think to get their opinion – or maybe didn’t understand why they were laughing so much?

To anyone who knows the history of cold fusion, this is hilarious. Cold fusion was originally a finding in electrochemistry, not physics. Electrochemists, experts in measuring heat, were finding heat they could not explain with chemistry. Because the level of the heat was beyond what they understood as chemistry, they did speculate that it was nuclear. They had some evidence of neutron generation, far, far below the levels expected if the reaction was ordinary fusion, and they reported it. That evidence was artifact, error, so physicists, of course, laughed at them for their mistake in nuclear physics, which was outside their field. But then physicists tried to do electrochemistry, which can be far more difficult than it would appear to a plasma physicist, say. Many looked for neutrons and when they found no neutrons, proclaimed “cold fusion is dead.” What we now know is that the reaction originally found, from multiple confirmed experiments, is generating helium from deuterium, and that reaction would produce some of the observed heat, but, if that reaction were ordinary fusion, somehow induced to only result in the rare helium branch, it would produce very hot gamma rays, which would also be dangerous.

The reaction, whatever it is, produces helium and heat, and very little else. There are suspicions of low-energy photons that would not be easily detected, i.e., bursts of them. None of this is expected. So far, all we really know is, as to major products, there is helium and there is heat. No plasma physicist would be expected to have any clue about this. As to Rossi’s claimed nickel hydride reactions, again, a straight fusion theory would predict a way-crazy-low rate. In general, cold fusion results are based on something unknown, and if you want to know about them, as experimental results, the people to ask are the experts who know how to make those measurements. A plasma physicist from JET would be clueless. Totally out of his field, the only connection is “fusion.” And if this is fusion, it is of a kind they have never seen.

(There are extensive reports of tritium production, but the rates a far below what would be associated with the heat, and my sense is that tritium, when produced, is from a rare secondary reaction. Very rare.

Bottom line, Woodford claims that he or his people did investigate the field and decided (like Darden before them) to get his feet wet. Woodford actually committed up to $200 million if needed. My sense of the field is that that is not enough to insure success. But a carefully managed program could identify promising technology and then seek to take it to the next level, including raising additional research funding. Nothing, so far, is meriting any kind of crash program.

Unfortunately, much research in the field is secret. Which can also become an excuse for fraud. IH now has some very extensive experience with that. They, and many others, out of their experience, will be more careful, and that’s a good outcome. Rossi originally claimed he would sell his “secret” for $100 million. He didn’t get it and is very unlikely to see serious money again.

Rossi also showed that some scientists can be fooled. He actually did an amazing job of it!

Again, bottom line, if one does not trust Woodford to perform due diligence, don’t invest with Woodford! Many of his investments are risky, but overall payoff will depend on his skill at balancing risk with reward, and the probabilities.

Abd ul-Rahman Lomax Sep 01, 2017 at 01:26

Because this comment section does not allow threaded comments, I am replying to @PaulSh on a page on my blog. I have written, there, a review of the article, and also replies to almost all comments here. Comments there are welcome.

http://coldfusioncommunity.net/citywire-on-woodford-and-rossi-v-darden/#Comments

Update

Capt Ahab: 11:27 on 02 September 2017

Mr Woodford’s name appears far too often for all the wrong reasons

Woodford was very little involved with the lawsuit and is not known to have played any role in the Settlement Agreement. It is likely, however, from ongoing behavior of Woodford that they were supportive of IH’s determination to “not write a check” to Rossi. They appears that Woodford invested another $2 million in IHHI in June, 2017, from a June 19, 2017, allotment of more Series A shares.

See also Woodford WEIF holdings,, as of 31 July, 2017, lines 102 and 115. For WPCT, see as of 31 July, 2017, lines 37 and 52. As I recall, but do not have links at hand, Woodford previously had two holdings, now there are likely four. As would be expected from IH (and therefore IHHI) writing off the Rossi investment and any residual value assigned to the License that they returned, the value of Woodford investments in IHHI has declined; however, this was expected, it was understood that IHHI was not likely to generate any income, but would require additional investment.

(On former IHHI share allocations, see the 24 May 2016 Annual Return of IHHI, as of 21 April, 2016. There are two lines for entities holding Series A shares (which were issued for $50 million US, collectively), as Norwood Nominees, which would be trusts with owner concealed.) These could be compared with Woodford statements, but it’s more complex than I care to investigate.)

Mary Yugo Sep 05, 2017 at 22:26

Opening statements of all parties in the trial (Rossi, IH, countersuit, and two third parties) — thanks to “Abd”
http://coldfusioncommunity.net/rvd-opening-statements/

Thanks, MY. While I might ordinarily think, when someone like you thanks me, “OMG, what am I doing wrong?”, set that aside. It seems like all “sides” are thanking me for that page. That is actually a sign of doing something right, forget the damn personal reactions. Maybe we can build on this.

Mary Yugo Sep 06, 2017 at 19:40

“The way I read both the linked blog and the actual settlement, Industrial Heat is finished. To say that Rossi is “receiving the license to the E-Cat” is a bit of an understatement because he is actually having the licence returned to him along with all existing hardware and IP – in other words, IH will have nothing.”

Actually, it is Rossi who ends up with nothing but all the evidence IH was able to generate shows clearly that his devices do not produce energy. They are simply electric heaters. And IH tried to make Rossi equipment work for going on three years with Rossi’s help and supposedly his full cooperation which is what they originally gave him TEN MILLION DOLLARS to get!

IH still has investment capital and is supposedly working with the most clever people they can find to make LENR work. Personally, I don’t think they will but they are hardly “finished.”

You can get more input on this from Dewey Weaver, an IH principal, who posts discussions in this thread:

https://www.lenr-forum.com/forum/thread/5287-rossi-vs-darden-aftermath-discussions/?postID=70796#post70796

That is a good place to learn what is going on with LENR and IH today and to discuss it pro and con although with somewhat heavy handed pro-LENR moderation.

Rossi did walk with what was left of the $11.5 million he was paid, minus legal fees, which were, I assume, considerable. There is really only one “heavy-handed” LENR Forum moderator, Alan Smith, who just banned Ascoli65.

Using moderation tools to argue with a user, maintaining off-topic confusion, not good. Alan doesn’t use gentler alternatives. There is plenty of marginal-libel on LF, routinely tolerated. So why this particular suddenly strong enforcement? I think it’s personal, reflective of a desire to protect Levi from understandable criticism, and, if so, Alan should properly defer to other administrators, if there are any.

However, consistently, LF ownership has supported Alan. That’s Nygren’s right. He gets what he pays for. (In this case, free moderation labor, with the obvious cost, power in the hands of the moderator. It is entirely unclear if Alan’s actions are a priori supported by the Team. They tend to have a very different quality from the actions of other moderators.

Update

There is a new article on Citywire about Woodford. It’s quite good, my opinion. A video has Woodford explaining his reaction to recent losses, and his investment philosophy. My opinion: he knows exactly what he is doing, it is a long-term and overall highly profitable strategy, albeit with some risk.

The IH (thus IHHI) losses were expected. He points out that he works closely with the management of small unquoted businesses, and has full information. The large losses that did impact his fund value (IHHI is tiny by comparison) were with quoted stocks, where regulation prevents the full flow of information. (I’d never before considered this as to how it impacts investment decisions). What he comes to is that if one does not trust the management of a quoted business, don’t invest in it. He didn’t say it quite like this, but I will: if it seems they are treating you like mushrooms, i.e., keeping you in the dark and feeding you bullshit, ask the necessary questions — and, obviously, consider divesting, and with a large stake, that may impact the market valuation of that business.

Some of the Planet Rossi community are mushrooms, from where they choose to live and what they apparently choose to believe. See my comment there, and responses to it.

 

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