Tasman Sues Competitors in Insulation Market

14th August 2012

Tasman Sues Competitors in Insulation Market

Tasman Insulation New Zealand Limited (part of Fletcher Building Holdings Limited) has commenced High Court proceedings against Knauf Insulation, BuildForNextGen and Eco Insulation, over the launch of EARTHWOOL® insulation in New Zealand, which now competes with Tasman’s PINK BATTS product.

EARTHWOOL® is manufactured by Knauf Insulation (a family owned business headquartered in Germany) and is marketed in Europe, USA, Russia, Australia and now also in New Zealand. Around the world EARTHWOOL® has rapidly gained share in every country in which it has been launched since 2009 because of the softer fibres, advanced compression packaging but mainly through the use of ECOSE TechnologyTM (which avoids the addition of formaldehyde which is classified as a carcinogen).

During the launch of EARTHWOOL® in New Zealand, Knauf Insulation supplied a small quantity of product with the words ‘batts’ included in installation instructions. Tasman has a trade mark for PINK BATTS but also claims that the word ‘batts’ is its trade mark, so only Tasman may use that word in relation to insulation and that use of that word by any other party will be an infringement.

Tasman is also alleging that the promotion of EARTHWOOL® products is misleading and deceptive because EARTHWOOL® is made from sand and recycled glass not sheep’s wool.

In response Knauf Insulation, BuildForNextGen and Eco Insulation have rejected these claims and believe that:

• The word “batts” is a generic term used throughout the world (including in New Zealand) and which anyone should be free to use to describe insulation products in a rectangular format (principally for installation in walls and ceilings);
• The trade mark EARTHWOOL® is not misleading (and consumers understand those products are fibre-glass based); and
• Tasman is using the Court proceedings in an attempt to inhibit the entry of a competitor and suppress legitimate competition.

Knauf Insulation has acknowledged that PINK BATTS is a trade mark but is seeking to have Tasman’s trade mark registration for the word ‘batts’ revoked on the basis that ‘batts’ is a generic term and should be available to anyone to use. As is the case in other countries, using the term ‘batts’ generically makes it easier for architects and builders to specify relevant product and does not prevent the use of a brand name in conjunction with batts. For example, Knauf Insulation uses the term EcoBatt in the United States, and Tasman uses Pink Batts.

Tasman has been the dominant player in the New Zealand construction industry for decades and is aggressively fighting the introduction of new insulation products which compete with its Pink Batts products. Knauf Insulation is one of the largest and fastest growing insulation manufacturers in the world with a successful track record of innovation and international expansion due largely to its proprietary technology and advanced products. Knauf Insulation, BuildForNextGen and Eco Insulation believe that New Zealanders will benefit from competition in the market for insulation, and that they should be allowed to use their trade mark EARTHWOOL® and the word ‘batts’ to describe their products (as is the case around the world).

Nick Hall of BuildForNextGen says “We don’t want to be in this litigation, but we do want to sell this high quality product and give New Zealanders the benefits of competition. We hope the outcome of the case is exactly that – an open and competitive market, which will be good for New Zealand consumers and continuing to reduce the cost of construction”.

Knauf produces EARTHWOOL® insulation products manufactured using its proprietary ECOSE TechnologyTM, which it believes is a safer and more environmentally friendly method of production compared to older technology commonly involving the addition of formaldehyde. Formaldehyde has been classified as a ‘known human carcinogen’ by the United States National Toxicology Program. The New Zealand Department of Labour has also stated that:

“Even very low workplace carcinogenic risks are considered unacceptable; and some predictive models suggest such risks cannot be completely excluded with formaldehyde levels of 1 [part per million] (or indeed lower than that). With suspected or even potential carcinogens, minimising levels to the extent feasible can always be justified from a safety perspective”.

Many designers of building and clothing products around the world are switching specifications to more environmentally friendly and safer products, including those using less or no formaldehyde. Even the London Organising Committee for the Olympic Games requested the use of building products without added formaldehyde.

Knauf is pleased to have removed the addition of formaldehyde from its supply chain, and believes that not only makes its EARTHWOOL® products safer and more environmentally responsible but will also give confidence to insulation installers, builders and home owners in New Zealand. It believes socially conscious consumers will support its efforts and will choose EARTHWOOL® over products which are manufactured with the addition of formaldehyde.

With the support of Knauf Insulation (and despite its superior features) Eco Insulation and BuildForNextGen have been able to offer EARTHWOOL® very competitively and its presence in the market has already given New Zealand consumers some of the advantages of genuine competition.

BuildForNextGen, Eco Insulation and Knauf Insulation will fight the Court proceedings vigorously and believe that defeating Tasman in those proceedings will be of long term benefit to New Zealand consumers.

ENDS

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