BARTZ et al v. MOORE, JR. et al - Page 4


               Interference No. 104,180                                                                                               

               and Mr. Henry Moore, senior party co-inventor, was the primary contact at American during the                          
               entire period of American’s involvement in the project.                                                                
                       Alzeta prepared a Phase 1 Proposal and sent the same to SCAQMD, SCG and                                        
               Mr. Moore. The company established the overall objective of this project as developing a                               
               combustion system of lowest possible cost that will reduce NOx emissions from residential water                        
               heaters to levels close to 10ng/JUH.  A further objective of the project was for Alzeta and                            
               American to demonstrate a production prototype water heater.                                                           
                       Phase I of the project began on October 1, 1989 and continued until February 28, 1991.                         
               During this time, Alzeta worked with a plurality of shapes and sizes of ceramic burners in an                          
               effort to achieve the project goals.  Phase 2 began in March of 1991 and ended in September of                         
               1992, and Phase 3 began on March 1, 1993 and ended in August of the same year.                                         
                       Near the end of Phase 1, Alzeta prepared a Phase 2 Proposal dated December 3, 1990,                            
               and submitted the proposal to those involved in the project.  The proposal states that “Alzeta will                    
               focus on burner and inspirator performance while American Appliance will focus on tank and                             
               controls performance” (BX-J8).  During Phase 2, Alzeta determined that a flat plate burner was a                       
               possible solution to the problem.                                                                                      
                       In September 1992, Alzeta prepared and forwarded a Phase 3 Proposal to Moore.  The                             
               Phase 3 Proposal indicates that it would be Alzeta’s responsibility to develop a flat plate low                        
               NOx burner (BX-J9).  The proposal includes a table that sets forth performance specifications for                      
               the burner being developed by Alzeta.  Moore endorsed the Phase 3 Proposal by way of a letter                          
               to SCAQMD dated December 7, 1992 (BX-J13).  In this letter, Moore indicated that American’s                            
               responsibilities and contributions in Phase 3 will include a supply of water heaters for field                         




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