Insulation industry news from Global Insulation

New Zealand: Fletcher Building Materials recorded consolidated sales of US$5.37bn during its 2022 financial year, up by 4.7% year-on-year from US$5.13bn in the previous year. Its net earnings also rose by 42%, to US$273m from US$193m.

The group's building materials division contributed US$1.02bn-worth (17%) of group sales. The division made capital expenditure investments of US$129m. During the financial year, its insulation subsidiaries Forman Building Systems and Tasman Insulation merged under its new Comfortech business. Comfortech will commission a new glasswool plant in mid-2023. Fletcher Building Materials says that, when operational, the new unit will help to serve increased ceiling insulation demand arising from changes to the New Zealand Building Code.

Fletcher Building Materials chief executive officer Ross Taylor said "The 2022 financial year has not been without its challenges. Global and national supply chain disruptions have continued into the third year of the Covid-19 pandemic." He added "The New Zealand Commerce Commission recently published its interim market study report into residential building supplies. The final report and recommendations will be published in December 2022 and in the meantime we will continue to work collaboratively with both the commission and the government."

New Zealand: The Court of Appeal has confirmed that the term 'batts' is not in common usage in New Zealand as part of a fight over whether Pink Batts' trademark of the word should be revoked.

Fletcher Building's unit Tasman Insulation makes Pink Batts and sued rival Knauf Insulation for trademark infringement because it used the words 'batt' and 'batts' on its Earthwool products and also on the earthwool.co.nz website. Tasman has owned the Batts trademark for insulation materials in New Zealand since 1973. The term 'batts' is not covered by trademark protection outside New Zealand and is used in Australia and the USA to describe pre-cut pieces of insulation material.

Knauf started exporting some of its Earthwool products to New Zealand in 2011 with packaging that used the words 'batt' and 'batts' in the installation instructions. In November 2011, Knauf applied to revoke Tasman's 'batts' trademark and in December 2015, Tasman started trademark infringement proceedings. Knauf claimed that Tasman's trademark registration was not valid because the word 'batts' had also become generic in New Zealand. To succeed, Knauf had to prove that 'batts' had become a common name in general use by New Zealanders and that this came about by Tasman's acts or omissions.

In his decision in May 2014, the High Court's Justice Brendan Brown did not believe it had. Even if he was wrong on this point, Justice Brown said, Knauf had fallen 'significantly short' of establishing that it was the acts and inactivity of Tasman that caused the trademark to become a common name in general use. The judge also made ruling claims from both sides that the other had breached the Fair Trading Act.

Parts of the case went to the Court of Appeal, which has now largely upheld Justice Brown's rulings. "Our analysis of the origins of the word 'batts' suggests that, at least in New Zealand, the word was not widely used or understood by the general public as a descriptive term and that it did not become a term in general public use until it began to be promoted by Tasman's predecessor after the trade mark was registered in 1973," said Justices Tony Randerson, Christine French and Mark Cooper. "Thereafter, in consequence of the marketing campaigns undertaken, the word 'batts' became strongly associated in the public mind with Tasman's Pink Batts insulation products. We conclude that the judge was correct to find that the term 'batts' had not become a common name in general public use."

The Court of Appeal confirmed that Knauf's use of the word 'batts' on the earthwool.co.nz website did not infringe Tasman's trademark. However, the three judges also found that Justice Brown was right to decide that the Earthwool brand and online marketing were misleading and deceptive. The trio differed with the High Court on one aspect; on whether Knauf's use of the word 'Batt' in the website's code infringed Tasman's trademark. It is understood this was at issue because the website showed in internet searches for 'batts.' While the High Court believed the use of the code did infringe the trademark, the three appeal judges said that this was wrong.

Australia: Fletcher Building is considering selling its insulation business, which could see the manufacturer of Pink Batts get a new owner. The company said that further asset sales were on the cards, although it did not specify insulation.

"Fletcher Building is undertaking an ongoing review of its business portfolio with a focus on lifting operational and financial performance and pursuing organic growth. The review process invariably leads to speculation on a range of possible outcomes. The company is aware of its continuous disclosure obligations and will promptly communicate to the market if or when there are substantive matters required to be disclosed," said a statement from Fletcher Building.

Fletcher holds its insulation assets, Tasman Insulation and Fletcher Insulation, in its light building products division. Fletcher Building has a market capitalisation of US$3.45bn and it is Australasia's biggest supplier of building and construction materials. These include laminates, cement, pipes and roofing. It has just won the New Zealand International Convention Centre contract in Auckland, as well as the contract to build Precinct Properties' US$396m, 38-level Downtown Tower at the foot of Queen St on the waterfront.

Fletcher Building's Chief Executive Mark Adamson made it clear at the 2015 annual meeting that he had not bought any new assets since starting in the job, but had instead been dealing with the difficult legacy of selling businesses that were either underperforming or not up to expectations. "In my time in the job, we have not made one single acquisition," said Adamson. "I have had to deal with what we have today. Profitability is improving, maybe not as fast as anyone would like."

Australia: Fletcher Building's subsidiary Tasman Insulation, which makes Pink Batts insulation, is appealing against a High Court decision that a rival using the word 'batts' was not in breach of trademarks.

The High Court in Auckland in May 2014 handed down a multi-pronged decision on a long-running dispute between Tasman Insulation and Knauf Insulation, which makes the rival Earthwool products. Justice Brendan Brown ruled that Tasman's claim largely succeeded. However, claims that Tasman's trademarks were infringed by Knauf using the word 'batt' and 'batts' in packaging were not upheld.

The Court of Appeal has confirmed that Tasman has lodged an appeal against the ruling and a hearing date has yet to be set. The dispute canvassed a range of claims, including false advertising and intellectual property breaches. The case has run since 2011.