Volume 12, Issue 4 - July/August 2008

Newsworthy

XPEL’s CEO Resigns,
Company Files Lawsuit


XPEL Technologies Corp. has
been making news lately by announcing Steven J. McAuley has resigned as its chief executive officer (CEO). The San Antonio-based paint protection provider also recently filed a complaint with the San Antonio United States District Court against several companies and individuals, claiming copyright infringement over its electronically distributed paint protection patterns.

XPEL’s board of directors announced that Nuno Ferreira of Calgary, Canada, has been named interim president and CEO. Ferreira has served as the president of XPEL’s Canadian subsidiary, XPEL Canada Corp.

“[Nuno] is an exceptional executive who we believe will restore the progress XPEL exhibited during Q3 of 2007,” says the company’s chairman, W. Rege Brunner.

The company reported a 73 percent increase in total revenues in its 2007 financial results. XPEL attributes the increase largely to the acquisition of Shadow Tinting Ltd., but partly to its Design Access Program fees. The company creates designs for window film and paint and headlamp protection products, and delivers them electronically via a web-based proprietary software program. Revenues from this service climbed 21 percent between years.

According to a complaint filed March 4, 2008, with the United States District Court, Western District of Texas San Antonio Division, XPEL is alleging that American Filter Film Distributors (AFF) in Euless, Texas, Film & Vinyl Designs LLC also in Euless, Texas, Brett Wassell, in his individual capacity, and Larry Wassell, also in his individual capacity, used modifications of its kit designs in a manner that violates the end user license agreement. The Civil Action lists XPEL’s cause of action as: Breach of Agreement(s), Violation of the Digital Millennium Copyright Act and Copyright Infringement, among others. In addition to refraining from future acts similar to those XPEL alleges, the company is requesting defendants be required to pay damages, along with prejudgment interest and post-judgment interest.

XPEL declined to comment, but Brett Wassell, a defendant, spoke with WINDOW FILM regarding the complaint.

“We believe the case has no merits and we’ve asked the court to dismiss the case,” says Brett Wassell. Brett and his father, Larry Wassell, are partners in Film & Vinyl Designs LLC. Larry Wassell is also owner of AFF for which Brett serves as general manager. The businesses are colocated, but Brett says Film & Vinyl Designs will be moving to a new location.

“American Filter Films has been in business for nearly 20 years now,” Brett explains. “Film & Vinyl Designs has been in business for more than four years. We’ve developed our window film patterns over the past four years. [For] our urethane patterns, we’re in a relationship with ClearMask, Jim Seely, and we’re using his urethane patterns and film designs. Jim Seely, ClearMask, has been in the business of creating urethane patterns for many years. XPEL’s claim that we took their patterns and put them in our software is without merit,” he says.

Seely says he believes his company, ClearMask™ in Trinidad, Texas, precedes XPEL’s entry into the urethane market.

“We’re a design firm and we’ve been around a long time,” Seely says. “We’ve been around since approximately 1994 and I’m sure we were around before XPEL was ever around selling urethane films.”

Brett Wassell says he expects this case to go to Federal Court and be settled, but he says it will surely be a long drawn-out process.

“I wish this lawsuit would go away,” he says, “but I'm not sure that I'm going to be that lucky. Larry and I both are going to do whatever we need to do ... obviously this is a black eye on the spotless record that AFF and Film Designs has had.”

Brett has another theory.

“I guess nobody’s ever heard of a big company going after a little company and, so, this is probably the first time this has ever happened,” he says. “It’s not the first time it’s happened and there’s a wake of these types of things happening, it seems, with XPEL. I haven’t had anybody offer to buy and I’ve heard stories before that it’s sometimes cheaper to sue somebody and make them buckle, and acquire their assets that way, than it is to buy them.”

Seely has similar views.

“I just think that XPEL’s time has run out,” Seely says. “That’s just my personal opinion. And instead of those guys just absolutely making a better mouse trap, they’ve decided to go around and either try to acquire their competition, or sue their competition.”

According to the complaint, XPEL’s software incorporates an end license user agreement which contractually limits the use of and computer access to the software and electronic copies of its Kit Designs. The complaint also states that XPEL applied for copyright protection for its Kit Designs August 30, 2007 and that the company believes AFF and/or Film & Vinyl Designs LLC utilized a “capture software” to make an electronic copy of its patterns. XPEL believes the companies and/or individuals used an unrelated program to access, use its patterns and redistribute the information, among other acts.

Look for more information in future issues of WINDOW FILM and our Focus on Film e-newsletter as this case unfolds. If you are net yet a subscriber to our newsletter, visit www.windowfilmmag.com and click on “FREE e-Newsletter.”

Moran Industries
Expands into Window Film Moran Industries, a Midlothian, Ill.-based franchiser specializing in the automotive after market, recently launched a home-based franchise concept for the residential and commercial flat glass window film industry. Officially started in March 2008, the SmartView Window Solutions franchise offers an in-home design consultation and professional installation operation based on a mobile concept.

“According to our research, this is the first and only window film franchise,” says Barb Moran, chief executive officer of Moran Industries. She says her company first kicked the concept around more than 12 years ago. Alta Mere, one of Moran’s many automotive centered franchise operations, has offered automotive films among its accessory items for approximately 20 years. But Moran says until recently, the architectural side hasn’t panned out as a viable stand-alone option. A little more than two years ago, her company decided it was time to test the concept by offering architectural products through its Alta Mere franchise.

“We’ve been testing this concept as a stand-alone business for a little [more than] two years now through some of our Alta Mere® stores,” Moran explains, adding that there are currently 24 locations nationwide. “Through their test marketing and our research, we came to the conclusion that it was a business that was definitely in need, capable of standing alone, and without a brick and mortar structure.”

Moran says the mobile, homebased concept is designed to offer an affordable means of entering the window film business.

“There are many people who would like to get into this business who can not only not afford a brick and mortar business, but also cannot afford to be liable for such,” she says. “By setting this franchise up as a mobile concept, it not only reduces the cost of entry, but it also reduces monthly overhead expenses by utilizing a mobile unit and a home-based office.”

Moran says the SmartView franchise is now officially off the ground and currently has two dealers operating in the Little Rock, Ark., area. In addition, several of the Alta Mere Architectural test dealers will continue operating as SmartView dealers, but retain the Alta Mere name. Moran says the concept has begun to attract interior design and glass cleaning companies as a potential add-on business.

The SmartView franchise provides training in both business operations and installation. Moran says the company is not a manufacturer, but SmartView brand architectural films have been around for some time now as a private label. The brand will not be available to other dealers, but offered exclusively through franchisees.

This new endeavor brings Moran’s total franchise offerings to six, including more than 200 locations nationwide.

Manufacturer News
Hüper Gains NFRC Certification Hüper Optik is now one of two window film providers to achieve National Fenestration Rating Council (NFRC) certification. The Houston-based company recently announced its dual-layer and single-layer ceramic film lines and its entire line of Select Series films have been added to NFRC’s list.

“We have been working diligently in collaboration with our manufacturing partner, Southwall Energy Technologies, to have our films tested by the NFRC … and we are so proud of this accomplishment,” says Hüper Optik president and chief executive officer Faisal Nazir.

Hüper Optik films earning NFRC certification include: Ceramic 20, Ceramic 30, Ceramic 40, Ceramic 50, Energy Saver Ceramic 35 and 45, and Select Acht, Dreiand Sech. Nazir says certification of these products will help his company reach one of its primary targets—the commercial segment.

“The highly respected NFRC certification will add credibility and help us assist a wider range of organizations seeking LEED certification,” Nazir says.

People
Michaud Joins Global Steve Michaud recently joined Global Window Films of Pembroke Pines, Fla., as the company’s international business consultant. Michaud previously served as the vice president of international sales for Film Technologies International and was one of the company’s shareholders. He has served in the window film industry since 1994 and has developed and managed an extensive portfolio of international businesses. “It was almost a renaissance to become part of such a dynamic and vertically-integrated manufacturing group,” Michaud says of Global. “The brand has such far-reaching international potential.”

Michaud is responsible for developing new strategic relationships for the Global brand worldwide. WF

WINDOW FILM
© Copyright 2008 Key Communications Inc. All rights reserved.
No reproduction of any type without expressed written permission.