BOM Exhibit 1028
`BOM v. Nidec
`IPR2014-01121
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`1
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`BOM v. Nidec
`IPR2014-01121
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`1
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`1.
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`I am the president of A. Kessler Consulting, LLC.
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`I am an
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`independent consultant providing professional management services for improving
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`engineering and quality operations, technical program management and general
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`business development,
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`including strategic planning and support
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`to achieve
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`business, manufacturing and marketing objectives.
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`2.
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`I formed my consulting business in 2011 after retiring from my
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`position as corporate vice president of research and development at Rheem
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`Manufacturing Company.
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`Previously, I was Vice President of Research and
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`Development of Rheem Manufacturing Co.’s. AC Division.
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`I worked at Rheem
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`Manufacturing Co. from 2004 to 2011. Rheem is a leading manufacturer of water
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`heaters and air conditioning and heating systems for residential and commercial
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`applications. While I was Vice President at Rheem I had responsibility for
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`engineering of all product lines, including residential HVAC systems. From 2004
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`to 2007, I was the Vice President of Research and Development for the air
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`conditioning division of Rheem, which included residential HVAC systems.
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`3.
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`Before my time with Rheem,
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`I worked for Fisher Controls
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`International from 2002 to 2004 which is a leading global manufacturer of process
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`control systems.
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`Declaration of Alan Kessler: 1802510
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`Declaration A. Kessler.doc
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`4.
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`From 1987 to 2001 , I worked for Raytheon/Amana Appliances, which
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`is was leading manufacturer of major appliances and heating and cooling products,
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`including residential HVAC systems. Amana Appliances was a subsidiary of
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`Goodman Manufacturing Co. from 1997 to 2001. While at Goodman, I was Vice
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`President, Technology and Government Relations, from 1999 to 2001, and before
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`that, from 1997 to 1999, I was a Vice President of Engineering and Quality at
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`Amana Appliances at which time I had responsibility for engineering and quality
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`on all product lines, including residential HVAC systems.
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`5.
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`From 1993 to 1997,
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`I was the Vice President, Engineering, at
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`Raytheon Appliances and Chief Technology Officer, responsible for Engineering
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`and Quality on all business unit product lines, including refrigeration, cooking,
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`microwave, laundry, sourced products and HVAC systems. From 1992 to 1993, I
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`was Vice President of Engineering at Amana Refrigeration Inc., a Raytheon
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`subsidiary, where I had management responsibility for engineering on all products
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`lines, including refrigeration, HVAC systems, cooking, microwave and sourced
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`products. From 1991 to 1992, I was Vice President, Engineering and Topton
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`operations at Caloric Corporation, a subsidiary of Raytheon.
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`In 1987 through
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`1991, I was the Chief Engineer of the Heating and Cooling division of Amana
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`Refrigeration Inc.
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`in which I had management responsibilities for the design,
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`development and production support of HVAC systems.
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`Declaration of Alan Kessler: 1802510
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`Declaration A. Kessler.doc
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`6.
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`From 1970 to 1987, I worked for the Trane Company, which is a
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`leading HVAC equipment manufacturer.
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`I held the positions of: Manager,
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`Unitary Design Engineering; from 1986 to 1987, Manager, Product Development
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`Engineering; from 1984 to 1986, Manager, Production Support Engineering; from
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`1983 to 1984, Senior Principal Engineer; 1983, Development Engineering
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`Manager; from 1979 to 1983, Development Engineering Supervisor; from 1978 to
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`1979; and Senior Development Engineer from 1974 to 1978 in which I had
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`technical engineering responsibility for residential and mid-range commercial
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`unitary HVAC split systems. Prior to that, I was a Project Development Engineer,
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`from 1970 to 1974, with responsibility for several product lines.
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`7.
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`I obtained a Bachelor of Science in Agricultural Engineering in 1969
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`from Kansas State University.
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`I then obtained a Master of Science in Engineering,
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`Mechanical Engineering, in 1970 from Purdue University.
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`I am a Life Member of
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`ASI-IRAE and I am a currently Licensed Professional Engineer in the states of
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`Kansas and Iowa. Attached hereto as Exhibit 1029 is a true and correct copy of my
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`current resume.
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`8.
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`I have over forty (40) plus years of experience in the HVAC industry,
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`including experience with product development, manufacturing, and marketing of
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`residential air conditioning products.
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`I have experience with the design and
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`Declaration A. Kessler.doc
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`application of electronically-commutated motors (“ECM”), variable speed motors
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`to furnaces and blower coils as replacement or substitutes for Permanent Split
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`Capacitor (“PSC”) motors for improved efficiency and operational benefits, and I
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`am knowledgeable of the market demand for these motors.
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`I have had executive
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`management responsibilities for engineering design, quality control, manufacturing
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`processes and product development to achieve business sales and marketing and
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`profit objectives on many product lines, including residential HVAC systems.
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`9.
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`I have been retained by Locke Lord LLP, counsel for Broad Ocean
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`Motors (“BOM”).
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`I am being compensated at the rate of $175 per hour. More
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`specifically, I have been retained to assist in determining whether Nidec’s blower
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`motors, allegedly incorporating the patented technology, were commercially
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`successful, and describe my experience as to the factors that drive an Original
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`Equipment Manufacturer (“OEM”) to purchase these motors that are to be used in
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`residential HVAC systems.
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`I have also been retained to offer rebuttal testimony to
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`any evidence or argument advanced by Nidec Motor Corporation (“Nidec”)
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`regarding issues of commercial success.
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`In all cases, my review and opinions are
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`based upon my experience in the field of residential HVAC systems.
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`10. While performing my analysis and developing the opinions reflected
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`in this Declaration, I relied upon various documents produced by the parties and
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`Declaration of Alan Kess1er:1802510
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`Declaration A. Kessler.doc
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`publicly-available information. A list of the information on which I have relied is
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`attached hereto as Exhibit 1030.
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`In addition, I have reviewed the declarations of
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`Mark Carrier and Christopher Bokhart and the attachments thereto.
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`11.
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`Through my experience described above while working at several
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`OEMs, I have gained significant experience designing and applying electric motors
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`and motor controls that are utilized in residential HVAC systems, including PSC
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`and ECM motors. OEMs typically sell to wholesalers or distributors who in turn
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`sell to installing contractors or directly to installing dealer/contractors who then
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`install and service equipment.
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`12.
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`The HVAC industry currently uses a variety of motor technologies for
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`use as blower motors in residential HVAC systems. The type specified in any
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`product design depends upon several criteria, including the product’s performance
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`goals, positioning, cost and potential applications.
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`Historically,
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`the two
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`predominant motor types have been permanent split capacitor (“PSC”) motors and
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`electronically commutated motors (“ECMs”) with variable speed capability which
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`came into use in the late 1990’s and early 2000’s. Using the GE/RB terminology,
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`first introduced ECMs into the market, their ECMs are typically called 2.0, 2.3/2.5,
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`3.0 and X13. The 2.x and 3.0 ECM motors are different generations of design with
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`increasing complexity and functional features.
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`In 2006, GE/RB introduced the
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`Declaration A. Kessler.doc
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`motor technology referred to as the X13 motor in response to the federal
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`govemment’s 13 SEER mandate that required OEM’s to produce more efficient
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`residential HVAC systems. These lower cost/feature X13 ECM motors are more
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`commonly known as constant torque motors. Emerson introduced the Magellan
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`motor designation to compete with the GE/RB 2.0 design; however,
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`it had a
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`separate control module that
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`required additional
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`installation and assembly
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`requirements; whereas the GE design had the controls integral with the motor.
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`Emerson/Nidec subsequently introduced additional designs that replaced the
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`Magellan that were roughly physically and functionally competitive with the
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`GE/RB designs. See table in Exhibit 1031 attached hereto.
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`13.
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`PSC motors have been the standard in the industry for many years and
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`represent the highest installed base. Typically PSC motors are typically positioned
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`by most motor and OEM manufacturers as a standard product offering and are used
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`in furnaces, air handlers, condensing units and packaged products. The popularity
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`of the PSC motor can be attributed to its simplicity, reliability,
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`low cost and
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`flexibility.
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`14.
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`PSC motors are available in both single-speed and multi-speed
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`designs. The nominal or synchronous single speed is determined by the number of
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`poles that are wound in the stator. The actual speed that it operates at depends on
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`Declaration A. Kessler.doc
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`the design details of the motor and the load as the speed slips down from
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`synchronous speed.
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`In order to make PSC motors multi speed and more flexible
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`for a variety of applications, manufacturers typically include speed taps that allow
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`the installing contractor or OEM to select the motor’s speed to ensure that the
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`correct amount of airflow is delivered at the external static pressure encountered in
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`the application. The speed taps result in more slip for lower operating speeds and
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`are less efficient. PSC motors do not have any internal controls that can be
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`programmed to automatically vary the speed and torque of the motor over an
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`operating range. ECM motor speed is determined by the design and controls.
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`These controls can typically be configured for constant speed or constant torque,
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`and the ECM motor efficiency is relatively similar at all settings.
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`15. While PSC motors are on average less efficient than ECM motors,
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`they can still be utilized as blower motors in high efficiency HVAC systems if the
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`other
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`system components are designed and selected to meet
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`the system
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`performance requirements.
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`Practically,
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`replacing a PSC motor with an
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`appropriately designed ECM will result in higher system efficiency at higher cost.
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`16.
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`ECM motors are inherently more efficient than alternating current
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`(“AC”) PSC motors due to their direct current (“DC”) design. ECM motors are
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`approximately eighty (80) percent efficient compared to sixty (60) percent
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`Declaration A. Kessler.doc
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`efficiency for typical of PSC motors. ECM motors are much more efficient at
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`lower speeds, which make them ideal for use in continuous fan mode and in other
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`applications where the PSC motor would operate on a lower speed tap, typically in
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`the heating mode.
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`17.
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`ECM motors can achieve quieter unit designs than PSC motors due in
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`part to their ability to be programmed for slowly ramping up speed when starting,
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`also known as soft start, and slowly ramping down when stopping.
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`18.
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`ECM motors are more expensive than their PSC counterparts and a
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`mechanical contractor can expect to pay a 40-60 percent cost premium.
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`19.
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`In early 2000s, Rheem, like most other OEMS, were being supplied
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`with HVAC ECM blower motors almost exclusively by GE/RB. Due to a number
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`of issues, including pricing, customer support, and delivery availability, Rheem,
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`like the other OEMs, began to look for a second source for these motors. The
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`process for finding a second source or supplier; however, is not a simple decision
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`that can be made on a whim, in my experience.
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`In fact, because of the importance
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`of such a decision, it has been my experience that these decisions are typically
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`made by a number of people who have to sign off on the second supplier and its
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`proposed motor,
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`including engineering, marketing, purchasing and financial
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`personnel. Of utmost importance to Rheem in deciding on a second supplier was
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`Declaration A. Kess1er.doc
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`finding the functional equivalent of the GE/RB motor — physical characteristics,
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`speed/airflow and power consumption/efficiency, quality/reliability and other
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`factors of lesser importance.
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`In addition, once it is determined that a potential
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`second source supplier can meet these requirements, pricing becomes the single
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`most important factor in the purchasing decision, in my experience.
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`I agree with
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`Mr. Carrier’s assessment of the HVAC market, it is extremely price sensitive and
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`of course OEMs want the best features at the lowest price. However, OEMs will
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`not pay more for features of little value, and in fact as long as a motor
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`manufacturer can meet an OEM’s functional requirements/specifications, it will
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`normally come down to a decision based on price, warranty, reliability and other
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`terms and conditions (Ts&Cs). OEMs could care less if a motor is sine wave or
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`not, or whether it uses Q and d independent axis to control a motor.
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`In fact non-
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`sine wave ECM motors continue to outsell Nidec’s sine wave motors.
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`20.
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`I was personally involved in the process when Rheem selected which
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`blower motors it would use in their HVAC systems, including the decision to use
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`Nidec ECM motors as an alternate to the GE/RB motors. We had challenged
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`Emerson/Nidec to develop a competitive alternate that had equivalent functional
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`performance and fit within the same physical envelope. We reviewed the
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`performance and reliability data provided by EMR/Nidec and tested motors in our
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`applications and applied the programming to use for the required speeds and then
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`they were added to the drawings/BOMs as alternates. After they were on the
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`drawings, purchasing made the decisions as to which supplier to purchase motors
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`from and/or the quantity split(s).
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`21.
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`I have reviewed Mark Carrier’s declaration in this matter and there are
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`several points with which I disagree. First and foremost, I disagree with Mr.
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`Carrier’s position that the most important features of variable speed HVAC motors
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`and controls are:
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`(1) constant air flow leading to improve comfort and efficiency
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`of the HVAC system; (2) quiet operation; and (3) performance when voltage drops.
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`22. Variable speed ECM motors from both GE/RB and Nidec can be configured
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`to perform constant airflow; there is nothing unique about that concept between
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`them. As long as a motor can be programmed to fall within an acceptable
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`operating range of constant airflow performance at similar efficiency, then it is
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`acceptable.
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`23.
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`I have reviewed the chart at page 16 of Mr. Carrier’s declaration
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`which appears to compare the performance of a Nidec ECM motor to that of a RB
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`motor with respect to maintaining constant CFM.
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`I have analyzed this chart and it
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`appears that the RB ECM 3.0 motor varies from -5.5% to +5.5% on airflow
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`between 0.25 and 0.75”sp, a typical application range versus the Nidec motor.
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`(The average variance of the speeds over this range is -1.7% to 2.4% at 0.25 and
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`0.75”sp and the actual average variance is 0.0% over the range.) This in my
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`opinion is well within the acceptable operation for comparable motors. As a point
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`of information, for reference, a 5% variance in evaporator airflow results in ~0.9%
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`capacity change and 0.5% system EER change at constant fan power.
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`24.
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`Secondly, with respect to noise, any noise associated with a blower
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`motor is typically masked by air noise anyway and therefore the motor noise is
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`relatively inconsequential. Mr. Carrier claims that the Nidec motor is on average
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`2dB quieter than a RB motor.
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`In my opinion a 2dB difference is not really
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`detectable and in fact, most literature on the subject states that the human ear
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`cannot begin to detect a noise difference until it reaches 3dB. An example of such
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`literature is attached hereto as Exhibit 1032. Moreover, if there is a noise issue, the
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`mechanical contractor can use several,
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`inexpensive damping methods that can
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`reduce any noise. As long as the motor is competitively quiet and meets the
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`requirements and specifications set forth by an OEM, in my experience mechanical
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`noise is not a major factor in the purchasing decision.
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`25.
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`Thirdly, with respect to performance when voltage drops, all OEMs
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`require their blower motors to operate when voltage drops within a certain range.
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`For example, at Rheem we required all systems to meet ARI Standard 210/240.
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`This standard specifies the voltage tolerance and maximum operating conditions
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`Declaration A. Kessler.doc
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`tests systems must pass. The requirement to operate at lower voltages is not
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`something unique with Nidec motors.
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`26.
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`I am familiar with the Emerson Magellan motor that was sold in the
`
`early 2000’s.
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`It was not successful in the marketplace because of many factors,
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`including that it was a more expensive product,
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`it required a separate control
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`module which inhibited its application,
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`it had increased assembly costs and
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`accessibility issues and there were issues concerning airflow restrictions inside the
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`unit due to the additional control module. While the Magellan may have been an
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`ECM variable speed motor,
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`it was significantly different than the Nidec ECM
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`motors at issue here.
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`27.
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`Based upon my experience, what was significant about the new Nidec
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`ECM motors were that they were the functional equivalent to the RB motor and fit
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`in the same physical envelop, while the Magellan was not.
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`28.
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`Based upon my experience, any perceived inefficiency in comparable
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`blower motors is not a very important factor because the blower motor uses such
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`little power relative to the total system.
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`Indeed, the outdoor compressor motor is
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`the most important motor that needs to be efficient, because of the amount of
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`power it uses. Moreover, a fan motor that has, for example, a 10% variance in
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`airflow is of little importance, given the fact that a 10% variance in evaporator
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`Declaration A. Kessler.doc
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`airflow is only 1.6% to 1.9% variance in system capacity and a lesser impact ~1.0-
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`1.2% on system EER assuming constant fan power.
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`29. Mr. Carrier takes his view of the fact that non-sinewave motors may
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`require mounting grommets/dampers to effectively damp/filter-out mechanical
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`noise.
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`If that were to occur,
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`those mounting grommet/dampers are relatively
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`inexpensive so if the sine-wave motor is relatively more expensive than the non-
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`sinewave motor; then based on my experience, an OEM would go with the cheaper
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`non-sinewave motor
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`if all other
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`factors are the same.
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`Further
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`from a
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`manufacturing standardization standpoint and to allow alternate production and
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`field replacements, a manufacture would typically include the standard motor
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`mounting brackets with damping grommets in all units, ECM or PSC.
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`30.
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`Based upon my experience, motor manufacturers, such as Nidec,
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`promote many different features in their motors, some of which have limited value
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`to OEMS. What is of the most critical importance to an OEM after it meets the
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`functional specifications is the quality and reliability which are followed by the
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`Ts&Cs - the length of warranty, the amount of any rebate and its effect on pricing,
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`payment terms, and order and delivery requirements etc.
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`31.
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`In addition to Mr. Carrier’s declaration, I have also reviewed the
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`declaration of Christopher Bokhart. Attached to his declaration are a number of
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`Declaration A. Kessler.doc
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`exhibits which include a market share analysis, sales volumes in the marketplace,
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`etc.
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`It is my understanding that those documents and information therefrom were
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`given to Mr. Bokhart by Nidec. Mr. Bokhart claims that Nidec gained a substantial
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`market share over the last several years, running close to almost 20% today.
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`It is
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`unclear how the market is determined and the mix of ECM vs PSC motors for the
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`various applications. Residential unitary HVAC equipment consists of a number
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`of different types of equipment — including filmaces with indoor blowers, air
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`handlers with indoor blowers, packaged units with indoor blowers, condensing
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`units with outdoor fans and packaged units with outdoor fans. All of these fans
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`and blowers have historically been PSC motors. With the advent of increasing
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`efficiency regulations ECM motors began to replace PSC motors in many
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`applications depending on cost and efficiency requirements.
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`It is important to
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`understand the total motor market and the share of each ECM manufacture of the
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`segments.
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`It appears based on my knowledge that Bokhart and Nidec overstate
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`their market share.
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`32. Mr. Carrier claims that a Goodman executive by the name of Mr.
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`Gary Clark was instrumental in convincing Goodman that Nidec’s variable speed
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`electric motors were technologically superior to the competition. First of all, one
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`executive at an OEM generally does not have that sort of power to influence and
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`certainly not dictate whether an OEM should switch motor suppliers. As noted
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`above, the decision to change ‘suppliers is of critical importance to any OEM. 8
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`decision that is not taken lightly and includes input from a number of fiinctions.
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`33.
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`I further declare that all statements made herein of my own knowledge are
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`true and that statements made herein on information believed to be true; and
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`further, that these statements were made with the knowledge that willful statements
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`and the like so made are punishable by a fine or imprisonment, or both under
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`Section 1001 of Title XVIII of the United States Code, and that such willful false
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`statements may jeopardize the validity of the application and any patent issuing
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`thereon or the patent to which this declaration is directed.
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`/¢%o/I; %%
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`Alan F. Kessler
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`Declaration ofAlan Kessler:1802Sl0
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`Dcclamion A Kesslermoc
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