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Green dream start-up takes Technion to court over devious behavior

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Published on : 08/20/2017
By : Arista Asmawati

The Technions response to the baseless allegations, leveled against it, is detailed in the defense statement submitted by the Technion as part of the court proceedings.


Green dream start-up takes Technion to court over devious behavior


What started out as the dream of a nonagenarian Jewish philanthropist from Chicago to develop, in partnership with the Technion in Haifa, a groundbreaking source of green energy, has turned into a multimillion- dollar lawsuit against Israel’s vaunted institute of technology by the philanthropist’s heirs.

The saga began on a balmy June morning in 2008, when sprightly retired businessman Hymen Milgrom, 93, stepped on a piezoelectric plate in a Technion laboratory. The energy created by the pressure of his weight was transformed into electricity within the plate, causing a series of LED strips to light up.

A beaming Milgrom turned to the Technion scientists and said: “This is amazing” and declared his intention of investing in their innovative concept of harvesting renewable electric energy from the pressure exerted by heavy vehicles on piezoelectric cables under the road surface of highways and under railway ties.
A purported piezoelectric generator with provision for AA batteries
However, according to Milgrom’s family, it turned out that Milgrom and Innowattech, the start-up company he founded, had been duped by a team of Technion scientists, led by Prof. Haim Abramovich. The scientists reportedly fabricated results, including using batteries instead of piezoelectric energy, to encourage Milgrom to continue investing.

Engineer Gregori Klein, who was employed by the Technion and worked on the project at the time of the alleged fraud, declared in an affidavit, shown to the Post, that leading scientists, including Dr. Eugeny Harash, a senior research scientist at the Technion, knew that the results of the piezoelectric generator experiments did not match expectations, but these facts were not reflected in reports submitted to Innowattech by Harash.

The Milgroms contend that top officials at the Technion were informed of the fraudulent results, but did not discipline Abramovich nor make any attempt to compensate the Milgrom family. Last year, the family filed an $8.5m. lawsuit against the Technion and Abramovich. According to the plaintiffs’ claim, they fell victim to severe fraud and “devious behavior” by Technion researchers.

In response to a request by the Post, the Technion issued the following statement: “The Technion categorically rejects the plaintiffs’ allegations and emphasizes that, contrary to the claims, the research, conducted by a start-up company owned by the plaintiffs, enjoyed no scientific supervision from the Technion, notwithstanding the involvement of researchers affiliated with it.

“The plaintiffs’ decision to launch a start-up company was based on a clear realization of the opportunities and risks associated with such an investment... Over the course of time, it became apparent to those involved with the company that the intended application of the technology was not economically feasible, which gave rise to a variety of claims, all unrelated to the Technion.

“The Technion’s response to the baseless allegations, leveled against it, is detailed in the defense statement submitted by the Technion as part of the court proceedings.”

The Milgroms initially filed their suit in February last year, and the matter was sent to retired Supreme Court justice Theodore Or at the end of 2016 for six months of fruitless mediation. Last month, the family reactivated the lawsuit.

Hymen Milgrom died in November 2011 and in his will left the Technion a gift of $4m., believing that together with the institute he had helped initiate a revolution in green energy production.

The family contends that had Milgrom been aware of the Technion’s fraudulent practices, he would not have donated money to the institution. They have demanded that the Technion transfer the money to another institute of higher learning in Israel. The Technion has refused and also declined to respond to a request by the Post for an explanation.

The background to the saga is that following the June 2008 piezoelectric demonstration at the Technion, Milgrom agreed to change the focus of Innowattech, set up in 2007 as a medical piezoelectric start-up company in a joint venture with the Technion, with Abramovich as CEO and co-founder. Milgrom was the founding investor in Innowattech, providing over half a million dollars.

Milgrom was soon shown a presentation that claimed enough energy could be harvested by piezoelectric generators embedded in one kilometer of a busy four-lane highway to power 5,000 homes. In August 2008, Milgrom pumped in an additional investment of $1.5m. to move the new project forward.

In December 2009, the Technion scientists reported that a “highly successful” piezoelectric program had been carried out in Haifa. Milgrom visited Innowattech for the last time in March 2011. He had invested a total of $4.5m. in the project, based on, what the family termed, the misrepresentations of Technion scientists.

The Technion, together with scientists from the institute, held around 20% of the shares of the company. Each year Innowattech paid the Technion hundreds of thousands of shekels for carrying out research for the company. Based on these reports, the Milgroms invested further funds in Innowattech.

By the end of 2009, Innowattech was generating a lot of media coverage and international interest and it seemed that the sky was the limit for its innovative green energy system.

But then the bubble burst. In June 2011, Milgrom’s son, Charles, a professor of orthopedics at Hadassah University Medical Center in Jerusalem, and another cofounder of Innowattech, visited Abramovich’s lab and was shown a piezoelectric walking plate that was being assembled to be sent to the German Road Authority.

Prof. Milgrom tested the plate himself and showed that it produced only a few microjoules of electricity – not enough to light up a single LED. In response, Abramovich claimed that he would modify the generator so that it could light up LEDs.

Later that month, Prof. Milgrom again visited the lab and was shown how the new walking plate lit up a series of LEDs.

He asked that the generator be opened so that he could see the mechanism. On dismantling, a series of AA batteries were revealed within the generator, Milgrom related to the Post.

Shortly after, the demonstration walkway was dismantled and hidden.

The pieces were found some time later and once again an internal battery pack had been placed in the generator.

After the death of Hymen Milgrom in November 2011, his son ordered the scientists to repeat all the prior experiments. None of the previous results could be replicated. The amount of energy produced from the road and highway generators was barely 10% of the originally reported levels.

All attempts to improve output failed and in 2014, the company was closed and all patents abandoned.

Prof. Milgrom told the Post that “despite Innowattech being a joint company with the Technion, based on research carried out in the laboratory of their faculty member, Prof. Abramovich; despite the revelation of the substitution of batteries for purported piezoelectric generators; and despite the direct payments to the Technion for research, the Technion has assumed no responsibility. On being made aware of the well-documented fraud, the Technion, which as a university claims to be a moral force in society, chose denial rather than righting the wrong.”


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