Volume 7, Issue 9 - October 2006

What’s News

LEGAL
Preferred Engineering Sues Genius Screen
Preferred Engineering Products Ltd., a Canadian-based manufacturer of door and window screens and hardware, filed a patent infringement lawsuit on August 10, 2006, in the Federal District Court for the Northern District of Illinois against Genius Rollerscreen System LLC—doing business as Genius Retractable Screen Systems—of Northport, Ala., and two of its distributors, Screen Concepts Inc. and Savocchi Glass Co. Inc. 

The lawsuit alleges that certain of Genius’ products infringe Preferred Engineering’s United States Patent No. 6,209,610 and No. 6,701,994 B2.

According to Jerald Schnayer, an attorney with the intellectual property firm Welsh & Katz, Ltd. of Chicago and counsel to Preferred Engineering, “Both of these patents concern various aspects of retractable screens that are commonly used, for example, on patio doors and windows. The products that we contend are infringing Preferred Engineering’s patents are retractable screens that are either sold as OEM equipment along with windows and doors, or are sold in the aftermarket as add-ons for windows and doors.”

In the lawsuit, Preferred Engineering seeks an order from the court instructing each of the defendants not to make, use or sell retractable screens for doors and windows that infringe the ‘610 and ‘994 patents, and that defendants be ordered to pay damages. 

“We expect that either the alleged infringers will pay substantial royalties to Preferred Engineering to license its technology, or Preferred Engineering will seek to have the companies prevented from selling products using its technology. Preferred Engineering will take whatever action necessary to prevent people from improperly using its patented technologies,” said Schnayer.

Genius was only recently served with the complaint and a representative declined to comment on this pending litigation, other than to state that it does not believe that its products infringe any validly issued patents and that it expects to vigorously defend against the claims of Preferred Engineering.

COMPANY NEWS
Royal Mouldings Expands Tennessee Facility
Royal Mouldings Ltd. of Marion, Va., a manufacturer and marketer of decorative cellular vinyl moulding extrusion components and systems in North America, has begun a $17 million expansion of its Bristol, Tenn., manufacturing facility that will add 250,000 square-feet to the present 150,000-square-foot plant.

Ground breaking and construction for the expansion began in April and is expected to be completed this month. The company says the expansion will boost the existing workforce in the Bristol area.

The company also has a new operation in Toronto, and is changing the product mix to offer “Texas Trim Source” shipments in its Waco, Texas, facility. 

“One of the primary reasons for the planned expansion of our Bristol plant is to elevate the level of our strategic ability through advanced technology, increased production and centralized location to deliver quality products efficiently to customers ranging from the Northeast, Midwest and Southeast in just one day,” said company president Art Ramey.

INDUSTRY NEWS
Date Announced for Fall 2006 Door and Window Industry Update
Jordan, Knauff & Co., an investment bank in Chicago, has announced that it will hold its Fall 2006 Window & Door Industry Update on November 15, 2006, at 2 p.m. Eastern Standard Time. In this interactive online presentation, expected to run one hour, the firm will cover a variety of topics relevant to door and window industry executives and entrepreneurs. The topics to be covered will include a review of recent transactions and plant expansions within the context of similar events over the past several years. Particular attention will be given to the insights to be gained by examining the public filings that have been made in connection with the PGT initial public offering. Another topic of note will be the beginning of an ongoing analysis of the importation of door and window products from China and other areas. In this and subsequent webinars, Jordan, Knauff & Co. will explore the impact of imported products and capital strategies for dealing with the changing competitive realities of the marketplace.

Participation in this presentation is complimentary. While attendees will have the opportunity to present questions to the moderator, attendance will be anonymous among participants. To join this presentation, visit www.jordanknauff.com/webinar.

KUDOS
Storm-Resistant Home Built for Injured Veteran
U.S. Army veteran SPC Kyle Burleson of the 1st Calvary Division, a critically wounded soldier who came home from Iraq as a quadriplegic, moved into his new home in Springhill, La., which was constructed by the non-profit Homes for Our Troops organization.

The custom-created house has 34 hurricane-resistant Simonton StormBreaker Plus® windows to protect it from severe weather. 

Several of the leading home products brands of Fortune Brands are stepping up support for Homes for Our Troops. Simonton Windows®, Hy-Lite® Products and Fypon® have all reenlisted as corporate partners with the non-profit organization that constructs homes specially adapted for returning U.S. veterans who are severely disabled while serving their country. Three additional brands in the Fortune Brands family, Dixie-Pacific™, Moen and Aristokraft® Cabinetry have also signed up to join the Homes for Our Troops team. 

Homes for Our Troops is currently working on 13 home projects in more than a dozen states. 

MARKET STUDIES
Study Shows European Window Market is Stagnant 
According to a current study by the InterConnection Consulting Group, 76 million window units were sold in 2005 in the European fenestration market which corresponds to a growth rate of 0.6 percent. Despite these lackluster figures, enough growth hot spots exist where firms can profit, according to the study. The study provides detailed insight about the regions and segments where growth is the greatest.

2005 was the year of the long expected upturn in the European Window market, though the results were rather disappointing for many manufacturers. After the market overcame the recession in 2004 with a growth of 1.7 percent, the research firm says the expectations have been high but it has not gained momentum. Even the market growth of 2.3 percent in value does not bolster enthusiasm since most price increases have been the natural result of higher energy costs and raw material prices, which put a great deal of pressure on manufacturers’ margins.

Nevertheless, several factors are still encouraging, according to the study. 

There are growth hot spots in the Western European window market. One of the most promising markets is Northern Europe. In 2005 Norway, Sweden and Finland grew in quantity by 6.5 percent, 7.9 percent and 5.4 percent respectively. After a further year of healthy increases, growth will drop off and even take a plunge in Finland by 2008, the study reports. In Northern Europe, growth rates will steadily decrease and then become negative in Spain after 2007.

Germany, the second largest market in Western Europe, is on a path to recovery, the study reveals after a decrease of 6.6 percent in 2005. In 2006 the German market will steady and afterwards solid growth rates are expected, even reaching 5.5 percent in 2008.

One of the driving forces in the Western European window market in 2005 will be the renovation segment, which accounted for more than half of the market (54.6 percent). Due to European Union regulations and increasing heating costs, more and more windows with insufficient insulation will be replaced with new ones. PVC manufacturers will benefit most from this development, according to the study. At the same time, the new construction segment will gain some momentum in the European window market, yet it will not hit the 2 percent mark for growth until 2008.

Concerning material groups, PVC windows will continue to increase its share but at a moderate rate because slight market saturation for PVC is already in sight in some countries. 

The more expensive combination windows will carry on its increasing demand with up to 10 percent growth each year until 2008 when it will reach a market share of 7.5 percent.

Windows made of wood decreased by 1.7 percent in 2005, but soon the low point will be reached. In 2008, for the first time in years, positive growth rates will be achieved, yet the study predicts wooden window market will continue to develop more slowly than the total market. In the long run, it will find its customers more in niche segments than in the mass market.

Upon closer examination of the customer segments, the residential sector (which accounted for 65.3 percent last year) is the key factor for market growth in 2005 as well as in 2006. Still, in the long-term the much smaller non-residential segment will catch up and show better growth rates than the residential segment.

The study shows that even in a stagnant market, opportunities present themselves, and chances exist to boost sales by presenting the right product in the right region and the right segment. InterConnection Consulting Group says that if one is flexible and quick enough to make appropriate strategic decisions, there is no reason for a recession.

DWM
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