Active Energy : Letter of Rebuttal – RMDE Inc.

DWF Law LLP

20 Fenchurch Street London EC3M 3AG DX 584 London T0333 320 2220 F0333 320 4440 www.dwf.law

The Board of Directors		Your Ref:	MQ/SER018/007
RMDE Environmentals Inc.		Our Ref:	JB/JMF/206604-33
3561 Carrington Road
West Kelowna			Please quote this when replying
BC				Date:	9 April 2021
V4t 3L8
Canada				Tel:	+(44) 333 320 2220
By	E-mail	Only:	[e-mail],	[e-mail],	[e-mail]
[e-mail], [e-mail], [e-mail]

Dear Sirs

Our client: Active Energy Group PLC ("AEG PLC")

• Licence Agreement between AEG PLC and RMDE Inc dated 27 November 2019 (the "Licence Agreement")
• RMDE Letter to AEG PLC dated 4 April 2021 (the "4 April Letter")

1. We act on behalf of AEG PLC. We refer to your letter dated 4 April 2021.

The status of the Patent Application and Licence IP

1. The position described in the 4 April Letter as to the status of our client's Canadian patent application under number 2,999,447 (the "Canadian Patent Application") and the Coalswitch product generally is wrong. Further, your various assertions that our client has not licenced RMDE Inc what it committed to, has not licenced anything of value and / or that its IP has been "under attack" are each misguided, wrong, and without foundation.
2. In particular, but without limitation:Prior Inspection
3. 1. As a preliminary point the Canadian Patent Application has been publically available for inspection since 15 August 2018. Accordingly, RMDE Inc had every opportunity to undertake all due diligence that it considered necessary as to that applicationprior to entering into the Licence Agreement. There can be no case of our client having misled RMDE Inc as to the nature and content of the Canadian Patent Application, as alleged or at all.
   2. Indeed, the RNS published upon the Licence Agreement having been executed included a quote provided by Grand Chief Derrickson, which stated that RMDE Inc had, prior to entering into the Licence Agreement, undertaken an"intensive period of due diligence", on which basis it was satisfied that AEG PLC could provide the necessary intellectual property support that it required.

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2.3. AEG PLC fully agrees with that analysis, and there has been no substantive change between the intellectual property it was able to offer then under the Licence Agreement (in the Territories provided by the Licence Agreement), and the intellectual property that it is able to offer now.

Novelty

1. You allege that the patent claims under the Canadian Patent Application are not directed to novel claims. That is not correct. There are several method claims within the pending application. Indeed, and merely by way of example, many of the claims are specifically drawn to "a process for producing a beneficiated solid biomass fuel".
2. For the avoidance of doubt, the application for a patent remains live in Canada and our client anticipates that it will be granted in the next month or so. Contrary to that which you allege, our client views that patent as a process patent (for the process of beneficiating and cleaning biomass), and our client considers that it will be of significant value (both to it, and to any licensee that receives the right to use intellectual property deriving from it).

No substantive Amendment

1. Your assertion that there have been substantive amendments to the application originally submitted to the CIPO is also wrong.
2. You emphasise the amendment filed by AEG PLC on 28 July 2020 relating to the novelty of the process in the pressurising steps which occur in the reaction vessel with perforated screen fingers. However, this process was clearly detailed in our client's initial application, which, as above, RMDE Inc had every opportunity to inspect prior to the Licence Agreement being entered into, as follows:
   "pressurizing the prewashed and preheated biomass in a reaction vessel, wherein the reaction vessel comprises an inner perforated screen separating the biomass from the main body of the reaction vessel and with one or more perforated screen fingers disposed within the reaction vessel and positioned within the biomass to increase exposure of the biomass to steam."
3. To be clear, none of the (i) Examiner Requisition issued on 3 April 2020 (ii) the amendment filed by AEG PLC on 28 July 2020; (iii) the Examiner Requisition issued on 24 December 2020; or (iv) the further amendment filed by AEG PLC on 2 March 2021 amounts to an "attack" on the intellectual property, a "rejection" by the CIPO of the application, or, in an way a "weakening" of the intellectual property, as alleged or at all. Accordingly, there was no duty on our client to notify you of these events, whether under the Licence Agreement or at all.

Valuable IP

2.9. Further, as you are aware, the Patent Application was merely one of a number of intellectual property rights licenced to RMDE Inc under the Licence Agreement. Rather, RMDE Inc also licenced and has the benefit of (within the Territories, as defined by the Licence Agreement) the following patents as, detailed in Schedule 3 of the Licence Agreement:

Application Number	Jurisdiction	Filing Date	Title
EP18171014.6	Europe	7 May 2018	Process for beneficiating
				and cleaning biomass
15/877,937	US	23	January 2018	Process for beneficiating
				and cleaning biomass
15/983,479	US	18	May 2018	Process for beneficiating
				and cleaning biomass

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Application Number	Jurisdiction	Filing Date	Title
PCT/IB2018/0535301	PCT	18 May 2018	Process for beneficiating
			and cleaning biomass
1901007227	Thailand	18 May 2018	Process for beneficiating
			and cleaning biomass
PI 2019006417	Malaysia	18 May 2018	Process for beneficiating
			and cleaning biomass

2.10. The Royalties you agreed to pay under the Licence Agreement are in respect of the usage, in the Territories and strictly subject to the terms of the Licence Agreement, of allof the Licenced IP - not only the Canadian Patent Application.

Conclusion on Intellectual Property

2.11. Taking all of the above together, it is clear that:

1. AEG PLC has licenced valuable Intellectual property to RMDE Inc under the Licence Agreement;
2. RMDE Inc had all necessary opportunities to consider the Canadian Patent Application before entering into the Licence Agreement (and it has publically stated that in undertook all necessary due diligence);
3. The Canadian Patent Application remains for a novel process patent which is of considerable value; and
4. There have been no events, attacks or amendments relating to the Canadian Patent Application that affect its status or value, or that our client was bound to bring to RMDE's attention.

No effective termination of the Licence Agreement and Repudiatory Breach

3. We note your assertion that the Licence Agreement has been declared "null and void". However, you have no legal right to make such a declaration and the Licence Agreement remains binding between its parties and valid subject only to our client making an election whether to accept your repudiatory breach of the Licence Agreement, in respect of which all of its rights are expressly reserved.

Conclusion

1. The terms of the Licence Agreement are expressly stated to be confidential to its parties and any further correspondence on this topic must take place in private between AEG PLC and RMDE inc, and not through the publication and/or distribution of open letters.
2. Any further correspondence on this matter should be addressed to this firm only.

Yours faithfully

DWF Law LLP

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