RvD: Rossi Partial Motion for Summary Judgement – Replication

Rossi Partial Motion for Summary Judgment on the issue of Replication.

Interspersed in indented bold are IH responses. My [Abd ul-Rahman Lomax]  comments are in indented italics. (Where they are responses to the Rossi claims, I made these comments before reading the IH responses — though I may have seen some of these previously.)

SOMF paragraph numbers have anchors and may be referenced by the page URL followed by “#p[n].”

27. After Plaintiffs filed the present lawsuit, Defendants claimed, for the first time, that
Plaintiffs breached the License Agreement by failing to provide all E-Cat IP. See Countercl. ¶¶ 9, 97.
Defendants’ only evidence to support this claim is their purported inability to replicate the technology.
See IH’s Responses and Objections to Rossi’s Second Set of Interrogatories no. 6, appended hereto as
Ex. 18.

27. Denied. Defendants have not been able to replicate the results Plaintiffs claimed
for the E-Cat technology. See Darden Decl. (attached hereto as Ex. 2) ¶ 16; Darden Dep.
(excepts of which are attached hereto as Composite Ex. 3) 100:7-101:5; AEG Dep. (excerpts of
which are attached hereto as Composite Ex. 4) 210:6-10; Industrial Heat Dep. (excerpts of
which are attached hereto as Composite Ex. 5) 40:25-41:10, 148:13-149:17, 150:14-151:4,
182:6-8; Vaughn Dep. (excerpts of which are attached hereto as Composite Ex. 6) 106:14-107:1,
128:24-129:9, 249:7-14); Ex. 7 (AEG Dep. Ex. 20).

Ex. 5 p. 182 is missing from the copy provided. It is here. For Ex. 7, handwritten notes, see transcription as part of a blog post. Of special interest here, pages 7 and 10.

The nature of this denial is not clear. I’d see an objection to “the first time,” and, as I recall, IH asserted failure to provide all E-Cat IP — which could be inadvertent — as an alternative. As an imputed breach of the agreement, it would have been remediable through Rossi working with IH to insure replication. If Rossi could not teach IH — or someone contracted to IH — how to make devices, it really would not matter if they “worked” or not, they would be useless to IH.

B. The License Agreement Contains No Replication Requirement.

28. The term “replicate” does not appear, in any variation of the term, in the License
Agreement or amendments thereto. See Ex. 4 (License Agreement); Ex. 5 (First Amendment); Ex. 7
(Second Amendment); Composite Ex. 13 at 149:9-12.

Ex. 13 is a Vaughn deposition. It contains the word “replicate” on p. 149, but does not support the claim here.

28. Denied. Plaintiffs’ Composite Exhibit 13 at 149:9-12 does not deal with whether
the word “replicate” appears in the License Agreement.

29. IH, through its representative Vaughn, testified that Defendants did not explicitly
include a replication requirement in the License Agreement because “we were trying not change [Dr.
Rossi’s] language unless we felt absolutely we needed to.” See Composite Ex. 13 at 149:25-150:6.

The deposition testimony in the place cited does not support the construction placed on it here. This is falsely representing evidence, though it could merely be sloppy. In the cited pages, Annesser was asking leading questions, but the testimony quoted here was not on the cited pages. The word “absolutely” does not occur in that deposition except on page 150. The quoted language is from the deposition for IH by Vaughn, Ex. 3 at 146:14-147:7.

What is remarkable is what came next. It negates the claim made above. Rossi counsel is claiming that the “not trying to change” is the reason (“because”) they did not include a replication requirement, while that was more or less dicta, or setting a context for what was then said immediately: Vaughn testifies that “And when you combine 12 (b) 7 and 13-1, we believe that gets the same effect.” That was a clear reason, i.e., if they could “get the same effect” without changing Rossi’s words, that’s the choice they would make. They did not “absolutely need to.” It all fits.

I have come to be unsurprised seeing these interpretive, creative revisions in the Annesser and Chaiken pleadings.

What seems to be effectively acknowledged here is that Rossi wrote the Agreement. which has legal consequences.

29. Denied because Plaintiffs have taken the testimony out of context. First,
Composite Exhibit 13 at 149:25-150:6 does not contain the quoted language and is not the
testimony of the corporate representative of IH. What the testimony of the corporate
representative of IH in fact provides is that the replication requirement is “inherent” in the
License Agreement, and that replication is required by sections 12(b) and 13.1. Ex. 5 at 146:14
147:10; 148:6-150-7. The full quotation relied upon by Plaintiffs is “when Andrea drafted the
agreement, we were trying not to change his language unless we felt absolutely we needed to.
And when you combine 12(b) and 13.1, we believe that gets the same effect.” Id. 149:25-150:7.

30. Defendant IPH, the only entity that has the contractual right to the E-Cat IP, has no
knowledge or evidence about its own claims regarding its purported inability to replicate. See
Composite Ex. 17 at 25:25-26:17, 41:11-42:7.

Annesser and Chaiker (A&C) are here using a technical legal argument as if it were fact. There was a dispute over the questions to be asked of the IPH representative, Fogleman. As a result, Fogleman referred the questions to IH and probably the deposition of Vaugh, which was coming. A&C claimed that IPH should be sanctioned for failure to adequately testify. This was rejected, except that IH was ordered to pay costs. (It is not clear to me that this was a sound decision, but it might not be worth the costs of appeal, which could be much higher). This is, presumably, an obsolete argument.

30. Denied. The IPH corporate representative did not testify that he has no
knowledge or evidence about inability to replicate, but that he has “the same evidence that [IH]
has to support that evidence,” and that he has no knowledge “other than what [IH] knows.” IPH
Dep. (excerpts of which are attached hereto as Composite Ex. 8) 25:5-21. As detailed in
paragraph 27 supra, Defendants have ample evidence to support their inability to replicate.

31. Defendants could not point to a single document in which they notified Plaintiffs of
their alleged inability to replicate the technology. See Composite Ex. 3 at 151:16-23; Composite Ex.
13 at 150:9-151:15.

This was in a motion for summary judgment; dividing evidence into “documents” and “sworn testimony” allows A&C to present this argument as if an agreed or uncontested fact. The testimony does not establish “could not,” but only perhaps “did not.” Rossi was notified, the preponderance of the evidence is, but orally. Perhaps not in writing, but that would not be “necessary” until Rossi was claiming an $89 million payment. IH might eventually have issued that formal notice, as a step toward suing him. From their point of view, that would have been premature. Once Rossi exluded Murray, my sense is that IH patience largely evaporated. They still wanted to see what he had in Doral.

Ex 13 150:9 does not establish the point. Ex 3 151:16 is this:

5 Q. Did Industrial Heat ever make that
6 communication to Dr. Rossi in writing?
7 A. I don’t know if we did. And we were seeing him
8 quite frequently in person at that time. And so it
9 wouldn’t surprise me if we did not, that it was only
10 verbal. But I don’t know. There may be some written
11 communication along those lines.
12 And, you know, the other thing is, it was much
13 easier to communicate in person with Andrea than it was
14 via e-mail because of the way he would react or appeared
15 to react via e-mail. You can see that in his responses.

A&C ask why Rossi was not notified of the “violation.” The answer to that is obvious, Vaughn has just stated it. Technically, it was not a “violation” unless continued after formal notification. There was simply possible non-completion. It was up to IH to decide when to complain formally. Unless, of course, Rossi was declaring a GPT and creating an obligation to pay.

We might ask the same question about missing communication about Rossi. Did he put it in writing — as the Agreement and even the failed Second Amendment required — that the Doral test was a GPT? This was the first thing I noticed about the Complaint in April 2016: no allegation of such an agreement, only vague implications (from the Penon – Darden communication, which did not establish the point).

31. Denied. The cited testimony of the corporate representative of IH actually states that he does not “believe” that IH ever “in writing point[ed] to [provisions 12(b) and 13.1] and put those in writing and [said], Dr. Rossi, you are in violation of these two provisions.” The corporate representative of IH explained “we were seeing [Rossi] quite frequently in person at that time. And so it wouldn’t surprise me if we did not, that it was only verbal. But I don’t know. There may be some communication along those lines.” Ex. 5 at 151:7-23; see also Ex. 3 at 123:23-124:16. Composite Exhibit 13 does not deal with notifying Rossi about Defendants’ inability to replicate. Additionally, on June 1, 2015, Darden specifically told Rossi, in writing, “[w]e remain uncertain about our ability to replicate the technology, so we need to learn and understand this better.” Ex. 9 ([Rossi_00006555]).

IH 236 Ex. 3, the Darden deposition, does not include page 123.

32. Defendants had reported, on numerous occasions, their ability to replicate. See, e.g.
Composite Ex. 3 at 163:23-164:25; IH-00095250-52 appended hereto as Ex. 19.

Lost performative. Who reported and to whom? If there are numerous occasions, why are not numerous occasions evidenced? The Vaughn deposition for IH (Ex. 3) does not state what paragraph 32 claims. It actually states No, then adds a caveat, and then Annesser goes on with what starts on line 23:

23 Q. Well, let’s talk about Exhibit 20. Exhibit 20
24 is Bates marked 96250 through 95252. It is an e-mail
25 dated July 16, 2013 from you to Tom Darden. At the top it
1 looks like it was forwarded from an earlier e-mail that
2 day. And it’s at the middle or three-quarters of the way
3 down, excuse me, one-third of the way down, it says
4 “Industrial Heat update July 2013.”
5 What was the purpose of this update?
6 A. I imagine, if I had to guess, it was an update
7 to existing investors at that time.
8 Q. And do you know if this update was ever sent
9 out to investors?
10 A. I don’t know for certain, as Tom was sending
11 out the updates at that time. But if I had to guess, a
12 version of it likely was. Whether it was this version, I
13 don’t know.
14 Q. Okay. The second paragraph below, where it
15 says Industrial Heat update July 2013, the document
16 states, in the middle of that paragraph: “We tested our
17 plant at the end of April and beginning of May for four
18 days. During the test we operate 37 different reactors
19 for periods ranging from 24 hours to a few hours and the
20 results were good. Our engineer and the independent
21 engineer operating the test reported the machines produced
22 far more energy than they required to operate. Nearly 11
23 times as much in some instances versus our test
24 requirement of six times during the 24-hour test.”
25 A. Mm-hmm.

This is outrageous. That was not a test conducted by Industrial Heat. This was the Validation Test, and Darden was simply reporting what Rossi and Penon had reported. This was very early, before IH had any independent access to the reactors. The “independent engineer” was Penon, and it’s not clear that IH was aware of the prior relationship with Penon. Citing this test as an example of IH reporting “their ability to replicate” is blatantly deceptive. So, IH had an “engineer” present, Dameron?, who would have had no power to control the test (and IH likely knew the Rossi history of backing out of any testing where the observers attempted to confirm measurements.)

The above testimony immediately followed this exchange:

6 Q. Has Industrial Heat or any of its affiliates,
7 in any of it LENR investments ever come across a positive
8 COP in any of its testing?
9 A. It would work as also indeterminate and
10 ongoing. So it is ongoing. We will see.
11 Q. Has Industrial Heat ever told its investors
12 that it had received or it had achieved positive COP in
13 any of its testing?
14 A. Again, if we have, it was in a preliminary
15 communication that was later retracted. I’m not sure that
16 we have. But I just want to caveat that. Because I see
17 you are putting in front of me an e-mail here where it
18 says, I mentioned the 1.3 times COP test, and it looks
19 like maybe this was a draft update. Again, it is kind of
20 preliminary exuberance over something that we thought had
21 affirmed results which we were hopeful about. But later,
22 in further analysis, did not affirm those results.

The claims and questions here play fast and loose with “replicate.”  Notice that the other supposed example of the alleged “numerous reports” was not a public announcement or an announcement to investors, it was an excited internal report, just after IH had received the Plant in August, 2013. It was openly tentative and preliminary, and there is no evidence shown that this immediate — and very modest — result was confirmed. In any case, this would not have been a “replication” of the Validation Test with much higher reported COP, only a weak confirmation — and only if confirmed.

Commercially, in order to raise the $89 million, would need to be able not merely to see an anecdotal replication or confirmation at low COP, but to be able to reliably operate reactors at high COP (i.e., 6 or higher). The original concept of the GPT appeared to be to demonstrate this, though it was poorly designed for purpose, engineers would have written something quite different.

32. Denied. The cited testimony is taken out of context, and Exhibit 19 is not IH-
0009520-52. The testimony directly preceding that cited makes clear that any reports of
replication were “preliminary” communications that were “later retracted.” Ex. 5 at 163:11:22.
When discussing mention of a 1.3 times COP, the corporate representative for IH explained,
“Again, it is kind of preliminary exuberance over something that we thought had affirmed results
which we were hopeful about. But later, in further analysis, did not affirm those results.” Id.

33. IH’s corporate representative testified that it is possible that Defendants could not
“replicate” any results because (a) Defendants are lying about their inability to replicate; (b) IH did not have competent scientists or engineers working for it when it tried to replicate; (c) IH used faulty
equipment in its attempts to replicate; or (d) IH used inferior materials for the catalyst. See Composite
Ex. 3 at 159:10-161:4.

Again, this is an appalling distortion of the actual testimony. First of all, there is a line of questioning under way, and page 159 starts in the middle of it. It appears that Vaughn has given his own reasons for their inability to “replicate.” (This is much more clearly stated as being unable to make devices that show substantial excess heat when tested with improved test methods, rather than possibly defective ones.) Then this continues (and I am including what came before, from another version, page 158 and, further below, what came after, page 162):

14 Q. Okay. I am going to refer you to paragraphs 95
15 and 96 of your counterclaim, which is on page 52 and 53.
16 And this goes right to what we have been talking about,
17 the ability to replicate.
18 A. Mm-hmm.
19 Q. And 95 sets forth that: Leonardo and Rossi
20 purportedly transferred and delivered all E-Cat IP.
21 And paragraph 96, Industrial Heat states: Only
22 one of three conclusions can be drawn from the foregoing
23 facts. One, Leonardo and Rossi did not transfer and
24 deliver all E-Cat IP. Two, validation was never achieved
25 and Penon’s reported COP calculations were false. Or
1 three, both. Correct?
2 A. Yeah. I’m sorry, I just lost — Sorry, I’ve
3 got it back.
4 Q. Are you with me?
5 A. I am with you, yep.
6 Q. But isn’t it true that there other conclusions
7 that could be drawn?
8 A. If there are, they don’t come to mind. If
9 there are other conclusions that could be drawn, they
10 don’t come to mind.
11 Q. I mean, couldn’t it be that you could conclude
12 that Industrial Heat lied about its ability to replicate?
13 Is that a conclusion that could be drawn?
14 A. We did not lie about our ability to replicate.
15 Q. I am not saying that you did or didn’t. I am
16 saying, isn’t that a conclusion that could be drawn?
17 A. Hypothetically, I suppose that one could make
18 that argument.
19 Q. Could we conclude that Industrial Heat did not
20 have competent scientists or engineers working for it when
21 it tried to replicate?
22 A. No. As I mentioned, we had — we progressed
23 along the lines of sophistication the more we failed in
24 replication. We kept thinking, well, we didn’t
25 successfully replicate. We must not know what we are
1 doing. So we continued to get more sophisticated parties.
2 For example, Bowling and then later our engineering team,
3 both without success.
4 Q. But without knowing all that background
5 information, isn’t that a conclusion that could be drawn?
6 A. That one could say we weren’t sophisticated
7 enough to assess whether or not — I don’t know. That
8 would seem to me that that would be equally absurd. But I
9 guess you can hypothetically make that argument.
10 Q. Could someone conclude that Industrial Heat
11 used faulty equipment when it was running its test?
12 MR. BELL: Objection to form.
13 THE WITNESS: You could make that argument,
14 Brian. But I don’t believe that, you know, if you
15 were — if an expert were to go back and review all
16 that we did and how we did it, that is not a
17 conclusion they would come to.
18 BY MR. CHAIKEN:
19 Q. Okay. Could someone conclude that Industrial
20 Heat used inferior materials for the catalyst?
21 A. Again —
22 MR. BELL: Objection to form.
23 THE WITNESS: — I believe all of these are
24 hypothetical arguments that could be made. But it’s,
25 you know, we know what we did and we exhaustively
1 tested this, so that we would know before entering
2 into a conflict like this if it did, in fact, work or
3 not. Because certainly you wouldn’t be in this
4 position if it does, in fact, work.

Vaughn clearly did not testify “that it is possible that Defendants could not
“replicate” any results because [of the list of reasons]. Rather, he testified the opposite, then, given Annesser’s argumentative questions, acknowledged these as “hypothetical arguments that could be made” by someone who doesn’t know the facts, and Annesser actually led him into that: “Without knowing all that background information, isn’t that a conclusion that could be drawn?” My opinion: The IH attorney should have been objecting here, repeatedly, and Vaughn should not have allowed himself to speculate about “hypothetical.” I don’t think they really expected how cutthroat unethical Annesser and Chaiken would be.

“Is it possible that you might have murdered your ex-wife in a drunken stupor and have forgotten all about it? Okay, so you loved your ex, would never harm her, and don’t drink, but isn’t it hypothetically possible that you did drink heavily and thus have forgotten all about it?” Witnesses are not ordinarily asked about hypothetical possibilities, but about what they have witnessed.

That questioning went on:

5 BY MR. CHAIKEN:
6 Q. Could someone possibly conclude from these
7 facts that Industrial Heat didn’t properly follow
8 Dr. Rossi’s instructions?
9 MR. BELL: Objection to form.
10 THE WITNESS: That was his — the burden was on
11 him to ensure that we did follow the instructions and
12 that we were doing what he told us to do based on
13 transfer of the IP. And so, you know, if you want
14 to — if Andrea is saying, Well, they didn’t do what
15 I told them to do, then tell us what to do. You
16 know, I think we were there and saying that
17 frequently.
18 So it is hard to — in my opinion, that is a
19 hard argument to make, as well. Again, it falls
20 under your hypothetical category. But I don’t see
21 how, based on the exhaustive work that we did
22 initially, T. Barker and myself to some extent,
23 admittedly those were less sophisticated than the
24 other efforts, but it was because we thought it was
25 easy and a high order of magnitude signal. No
1 success there. Bauman, no success. Joe Murray and a
2 highly competent engineering team, with great
3 facilities and equipment, also didn’t succeed.
4 So at some point you have got to conclude that,
5 well — sorry, a door is opening. Well, either it
6 doesn’t work or they didn’t transfer the IP.
7 And so that’s where we are on the spectrum.
8 But I guess you could hypothetically argue anything.

I don’t expect to see sophistication from attorneys on the issue of LENR replications. It is well known that instructions for replication may fail even with full intention to communicate a method. Generally, LENR confirmation by sophisticated researchers (like McKubre of SRI) would start with a setup done by the original researcher and observed; if that worked as reported, then they would build the device themselves under supervision, and if that did not work, they would work with the originator until it did, and then they would engage in fully independent testing with the originator not present. An original researcher may do things without thinking them important, that are, in fact, important. How LENR works is not known, and replication failure is very common. However, a commercial-ready device must be reliably manufactured, according to very well-controlled plans. It is clear that, if Rossi did have working devices, the 1 MW Plant was not commercial-ready, because he failed to communicate how to make devices that worked when independently tested; all his tests were highly controlled by him. Yet from the fraudulent representations about the customer and other aspects of this case, it’s quite likely that it never worked, or never worked more than a tantalizing little (which is common in LENR).

33. Denied. This paragraph completely misstates the testimony.2


2 With respect to whether Defendants are lying about their inability to replicate, the corporate
representative testified “we did not lie about our ability to replicate.” Ex. 5 at 159:11-14. With respect to
whether IH did not have competent scientists or engineers, the corporate representative testified “that
would seem to me that that would be equally absurd.” Id. at 159:19-160:9. With respect to whether IH
used faulty equipment, the corporate representative testified “I don’t believe that, you know, if you were –
if an expert were to go back and review all that we did and how we did it, that is not a conclusion they
would come to.” Id. at 160:10-17. With respect to whether IH used inferior materials, the corporate
representative testified “we know what we did and we exhaustively tested this, so that we would know
before entering into a conflict like this if it did, in fact, work or not. Because certainly you wouldn’t be in
this position if it does, in fact, work. Id. at 160:19-161:4


The Industrial Heat response to this section of the partial MsJ

B. IH’s Inability to Replicate Plaintiffs’ Claimed E-Cat Testing Results Shows
Either Validation Was Not Achieved or Plaintiffs Did Not Transfer All of the
E-Cat IP.

Plaintiffs do not dispute that IH and IPH were not able to replicate the results Plaintiffs
claim they have achieved using the E-Cat IP. Indeed, no one has been able to replicate or
duplicate the results Plaintiffs claim they are achieving, with their E-Cats allegedly producing
tens of times, even over 100 times, the energy put into the E-Cats. 4th Am. AACT at 43-44, 62-
63. But Plaintiffs argue that Count I of the Counterclaims fails because the License Agreement
does not require that IH or IPH be able to replicate Plaintiffs’ results. This is wrong on many
grounds.

To begin, of course, whether or not the License Agreement required IH and IPH to be
able to replicate Plaintiffs’ results does not change the fact that Plaintiffs did not comply with the
License Agreement’s validation testing requirements. See Section III(A) supra.

In addition, IH and IPH’s ability to replicate Plaintiffs’ results is reflected in the License
Agreement. Plaintiffs represented and warranted that the E-Cat IP delivered under the
Agreement would be “all the . . . intellectual property that [was] necessary or useful for the
Company to develop, manufacture, make . . . and sell . . . all the products deriving from the ECat
IP.” License Agreement (Pl. SOMF Ex. 4) § 12(b). Additionally, the Agreement required
Rossi to “provide ongoing training and support to the Company in the use of the [1 MW] Plant
and the production of the E-Cat Products . . . to enable it to utilize the E-Cat IP, operate the [1
MW] Plant and produce E-Cat Products.” Id. § 13.3; Def. SOMF Ex. 5 at 146:14-147:10, 148:6-
150-7. IH and IPH’s inability to replicate Plaintiffs’ claimed results using the E-Cat IP (Def.
SOMF ¶ 27 & Ex. 9 ([Rossi__00006555]) is clear proof that Plaintiffs did not comply with
License Agreement Sections 12(b) and 13.3.

Finally, of course, IH and IPH’s inability to replicate Plaintiffs’ claimed results is also
relevant to whether Plaintiffs transferred all of the E-Cat IP as required by License Agreement
Section 3.2(b). If the E-Cat IP works as Plaintiffs claim, and if they provided all of that E-Cat IP
to IH and IPH, then IH and IPH should have been able to replicate Plaintiffs’ results. That they
could not creates at least a triable issue of fact as to whether Plaintiffs transferred “all E-Cat IP” to IH and IPH. Rossi’s conclusory and self-serving statement in his Affidavit that he transferred
all of the E-Cat IP, in the face of the evidence that IH and IPH could not use that IP to replicate
Plaintiffs’ results, is insufficient to require summary judgment in Plaintiffs’ favor. State Farm
Mut. Auto. Ins. Co. & State Farm Fire & Cas. Co. v. B&A Diagnostic, Inc., 145 F.Supp.3d 1154,
1158 (S.D. Fla. 2015). Equally insufficient is Plaintiffs’ argument that IH’s corporate
representative testified to “additional possible conclusions that one may draw with respect to
Defendants’ purported inability to replicate, including, inter alia, the conclusions that: (a)
Defendants are lying about their inability to replicate; (b) IH did not have competent scientists or
engineers working for it when it tried to replicate; (c) IH used faulty equipment in its attempts to
replicate; or (d) IH used inferior materials for the catalysts.” Pl. SOMF ¶33. This ignores the
representative’s full testimony. With respect to whether Defendants are lying about their
inability to replicate, IH’s corporate representative testified: “[W]e did not lie about our ability to
replicate.” Def. SOMF Ex. 5 at 159:11-14. With respect to whether IH had competent scientists
or engineers, the corporate representative testified: “[T]hat would seem to me that that would be
equally absurd.” Id. 159:19-160:9. With respect to whether IH used faulty equipment, the
corporate representative testified: “I don’t believe that, you know, if you were – if an expert were
to go back and review all that we did and how we did it, that is not a conclusion they would
come to.” Id. 160:10-17. With respect to whether IH used inferior materials, the corporate
representative testified: “[W]e know what we did and we exhaustively tested this, so that we
would know before entering into a conflict like this if it did, in fact, work or not.” Id. 160:19-
161:4.

In short, IH and IPH have paid Leonardo over $11 million for technology that they have
never been able to use to achieve the results Plaintiffs claim can be achieved (or even anything
remotely close to those results). Plaintiffs’ position that this is immaterial to this litigation is
absurd.

Rossi’s Reply on this issue

b. Replication.

Defendants claimed on numerous occasions that they had replicated the results that Plaintiffs
achieved using the E-Cat IP, see SOF ¶ 32; SOFO ¶ 40, only to allege otherwise once they had been
sued for the $89 million.4
Notably, Defendants could not point to a single document in which they
notified Plaintiffs of their alleged inability to replicate the technology, whether as a result of their
incompetence, faulty equipment, inferior materials, or outright lies. See SOF ¶¶ 31, 33. The best
Defendants could muster was an email provided after they received their $50 million investment,
wherein Darden states, “(w)e remain uncertain about our ability to replicate the technology…” See
Def. SOFO ¶ 31.

Regardless, Defendants knowingly and intentionally omitted any such requirement in the
License Agreement. See SOF ¶¶ 28-29. There is no provision in the License Agreement that conditions
performance by any party upon Defendants’ independent ability to replicate any test result or generate
any energy whatsoever. See SOF ¶¶ 28-33; SOFO ¶ 40. It is a “commonsense principal of [contract]
interpretation that ‘the absence of a provision from a contract is evidence of an intention to exclude it
rather than an intention to include it.” Megdal Assocs., 2016 U.S. Dist. LEXIS 119168, at *11 (quoting
Azalea Park Util., Inc. v Knox-Fla. Dev. Corp., 127 So. 2d 121, 123 (Fla. 2d DCA 1961)).The parties
did agree to validate the technology by virtue of two separate tests: the Validation Test and the GPT
Test. If Defendants intended Plaintiffs to have further obligations, they could have insisted they be
placed in the License Agreement. They did not.
To the extent that Count 1 is predicated on their inability to accomplish goals not contained in
the parties’ contract, Defendants’ claim fails as a matter of law.


Defendants provide self-serving testimony that their positive results were “preliminary” and were “later retracted.” See Def. SOFO ¶ 32. Of course, Defendants offer no written evidence of such retractions, whether they be contemporaneous or after the present lawsuit was filed.


Without documentation of the “reports” claimed, studying retractions would be meaningless. Rossi does not show the “numerous occasions” claimed in pararaph 32. Only two examples were given. The first was a very early comment about the Validation Test, which was not a positive result by IH. The second was an internal memo, not a formally issued report. So for what was shown, no retraction would be needed. IH was not preparing to sue Rossi, that’s rather obvious, but was, before the end of the Doral “test,” preparing to defend. The comment quoted was from this (Ex. 5, page 163):

11 Q. Has Industrial Heat ever told its investors
12 that it had received or it had achieved positive COP in
13 any of its testing?
14 A. Again, if we have, it was in a preliminary
15 communication that was later retracted. I’m not sure that
16 we have. But I just want to caveat that. Because I see
17 you are putting in front of me an e-mail here where it
18 says, I mentioned the 1.3 times COP test, and it looks
19 like maybe this was a draft update. Again, it is kind of
20 preliminary exuberance over something that we thought had
21 affirmed results which we were hopeful about. But later,
22 in further analysis, did not affirm those results.

That email was from December 2, 2013, when IH had only a little experience testing Rossi technology. We know that initial tests used Rossi measurement methods. All those results would be preliminary. Read the email. It was explicitly preliminary, and to not to be noised about. It said “further analysis and replication required.” The deposition testimony matches that email. And Rossi’s citations are highly deceptive, distorting testimony. So far, they have gotten away with this, Rossi faux “disputes” kept the Judge from granting Summary Judgment against him. But he has apparently made blatantly false statements in depositions, as a jury would conclude. That could end up creating a very high price, and his attorneys would know about this, so it could be a high price for them as well. (Details matter and we don’t have details.)

If this was not issued to investors (other than the close group of Darden, Vaughn, and Weaver and maybe T. Barker Dameron), there was nothing to retract. Not disclosing investor communications, which were requested, would be asking for serious trouble, since it would only take one whistle-blower to collapse the entire house of cards. It’s unlikely. It seems likely that all those early test results were disclosed to Rossi, so … if the two examples he cited were the best of it, that’s a very bad sign for his case.

My overall conclusion.

The Rossi Motion was not written to influence the Court, other than possibly to impress on them that there were deep disagreements, to distract from the IH Motion for Summary Judgment. (If so, that worked. The Judge does not appear to have actually studied the evidence and arguments, for any of the MfJs.). Rather, this was written as grandstanding for supporters, present and possibly future. That also worked, at least temporarily, the ideas in this motion have been oft-repeated by Rossi followers as if fact. Then, when the lawsuit goes against Rossi, he will claim that the court unfairly ignored the “facts” he presented, and he will attempt to find new investors. He might be doing so from prison, but he is obviously willing to risk that, and it wouldn’t be new for him.