This is a page that will accumulate common confusions about cold fusion, Rossi v. Darden, and other related issues.
Many people get their news from social media, discussion fora, etc., and memes arise and propagate. There are some that I have seen repeatedly, so here is one place to cover them and, hopefully, clear up some confusion, amid a profusion of rumor and misinterpretation. As always, comment is open and notice of errors is appreciated, or even error about errors! After all, if a reader thinks something is wrong, it either is incorrect or I, quite possibly, have poorly expressed what I know or think I know.
Did Industrial Heat demand that Andrea Rossi provide them with IP at the same time as they were declaring it worthless?
I have seen this several times. In a recent incarnation, on Lenr-forum, kevmolenr wrote:
Why did IH countersue to get Rossi’s IP if it was worthless?
IH did not do that. There is a “prayer for relief” from the final version of the Answer and Counterclaim. There is nothing there about “getting IP.” Kevmo also asks:
IH countersued asking for his IP. Did they or did they not obtain transfer of the IP after it was Validated according to that first report?: They obviously paid for it. What IP was IH countersuing for?
The “prayer” is where a plaintiff asks the court to determine and order something. This is it:
WHEREFORE, Counter-Plaintiffs respectfully request that the Court enter judgment in
their favor and against Counter-Defendants and Third Party Defendants as follows:
i. For compensatory and expectation damages and/or restitution in an amount to be
determined at trial;
ii. For costs of suit and for attorneys’ fees and costs;
iii. For pre-judgment interest; and
iv. For such other and further relief as this Court deems just and proper.
Others have explained the sequence of events. “IP” refers to “intellectual property,” and has two aspects: knowledge (“know-how”) and licensed rights. Industrial Heat was not happy with the conditions of the Validation Test, but it appears to me that they had decided to pinch their nose and go ahead, because they very much needed to know if Rossi had a real technology, Rossi’s claims were depressing investment in other LENR research. Why fund something that might produce a few watts if Rossi was producing kilowatts?
It is quite clear that IH essentially gave Rossi what he wanted, including allowing his friend Penon to be the “Engineer Responsible for Validation.” So though the Validation test stank, they accepted it, and the escrow transfer took place, which included an alleged transfer of what was needed to make the technology work.
IH claimed that, following instructions, and with the active assistance of Rossi, they were never able to show confirmed positive results.
In the settlement that ended the trial, reached after opening remarks and Rossi’s attorneys were setting up to begin their presentation, IH walked, giving up the IP, and no further exchange of funds either way. Often Planet Rossi has wondered why they had not accepted Rossi’s (alleged) offer, before he sued, to return the $10 million paid for the IP, to cancel the Agreement.
First, it is not clear that there ever was an offer. Second, they had invested, not just the $1.5 million for the reactor and $10 million for the IP, but perhaps a total of $25 million, including what they had paid Ampenergo, if I’m correct, as part of that, $5 million to surrender the U.S. rights. They considered it possible that Rossi did, in fact, have a technology, but had not disclosed it. If the technology were real, it could be worth a trillion dollars. Even a very small possibility of that would be worth holding on to the licence.
However, it appears that Rossi’s attorney convinced Rossi to walk as well, and then he could point out to IH that it was going to cost them millions of dollars to win, if they could win, and they might not recover their expenses. The $10 million payment was a done deal, Rossi’s attorneys would have argued estoppel , and to prove actual fraud in that validation test would have been difficult. The fraud that IH was claiming was over Rossi’s machinations to create the Doral fake guaranteed performance test, the fake customer, etc.
IH needed to decide to go ahead, very likely losing money (even if they “won”), or accept their losses and move on in LENR research with Woodford support. If they had believed there was even one chance in a thousand of Rossi Reality, I don’t think they would have let go of the license, they would have negotiated some compromise.
They concluded, I infer, that there was not even that much chance that the technology was real. In mercato veritas. The real market decided that Rossi’s E-cats were, with high certainty, worthless.
Many have claimed that they were foolish. I don’t think so. They needed to know, it was important to them, and they paid to find out, and they found out, to their satisfaction. My sense is that their boldness in investing in Rossi impressed Woodford Fund, and they obtained $50 million, so they doubled the money they could put into LENR research, and Woodford committed another $150 million if needed.
Rossi was angry that IH was investing in other approaches, calling them “competitors.” IH was actually interested in the science, and has funded research, including LENR theory. IH had no obligation to work exclusively with Rossi. Rossi also believed that they were disclosing his “secrets” to others. In fact, they had the right to do that, there was no non-disclosure agreement by IH. (The settlement agreement cancelled that right.) But Rossi’s secrets were worthless.