There was a large machine in Schiller's backyard. At first, it had only been used to detect brainwave frequencies. Later, Main Universe Batman used it to analyze the mysterious metal that had contaminated many Batmen.
Later, they learned that the mysterious metal was not metal at all, but a brainwave contaminant—an electromagnetic weapon created by The Batman Who Laughs to corrupt Batmen across different universes and draw them into his ranks.
Batman then deduced that it might be a mixture of Joker's and Batman's blood, thus learning that there was an entity in this world that was a fusion of Joker and Batman.
By that point, Batman could no longer spare the time to continue his research. He and the Main Universe's Joker began searching through various universes for recruits to form their own team.
But compared with the team those two had assembled, Schiller was actually more interested in Batman's machine.
Because people in Marvel were also researching brainwaves and theories of the soul, and Gray Mist was conducting research as well. After receiving the combined boost in intelligence from Batman and Iron Man, Gray Mist could now be considered a genius scientist.
Most importantly, his life form was exceptionally suited to researching this sort of subject. He had no brain to begin with; all his thoughts manifested as electrical waves, clearer and more intuitive than those of humans.
He proposed a possibility: the way The Batman Who Laughs and other demons contaminated human souls was actually a form of brainwave synchronization.
It was like placing an interference device around a human. By continually disrupting their brainwaves, it caused their souls to mutate, gave them thoughts they had never possessed before, and altered their way of thinking when they made important decisions. Naturally, the result appeared to be madness.