Innovative Designs Inc (IVDN)

[NevoTX]

FTC's pre-trial statement

Here is an excerpt from the FTC's pre-trial statement. It looks pretty damning to me. FTC claims to have 9 labs that say Insultex doesn't have the R-value IVDN claims; while IVDN only has one lab on their side. And that one lab appears to be on shaky foundations.

Again, I hope I'm wrong here.

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Defendant Innovative Designs, Inc. (“IDI”) widely disseminated false claims to sell its Insultex House Wrap (“Insultex”). Specifically, IDI claims that its 1-millimeter thick house wrap provides an R-value of 3 and that its 1.5-millimeter product provides R-6. In fact, these products have actual R-values of 0.2 and 0.3, respectively. IDI began marketing Insultex with these false claims in 2011, selling Insultex nationally through home supply retailers and distributors.

R-value is the numeric measure of insulation’s ability to restrict the flow of heat, and therefore, reduce energy costs. The higher the R-value, the better a product’s insulating ability. House wrap is a paper thin, moisture barrier applied between a home’s interior and exterior walls. House wrap is not generally sold with R-value claims. Indeed, IDI’s marketing touted Insultex as the “only house wrap with an R-value.”

For such a thin product to claim such a high R-value places Insultex in marked contrast with standard insulation. For instance, it would take one inch of traditional fiberglass batting to achieve the same R-value as the purported value of IDI’s 1 millimeter, or 0.0394 inch, product. Further, IDI admits that Insultex’s foam portion provides the house wrap’s insulating value. The foam accounts for 0.5 millimeters of the 1-millimeter product. In other words, IDI falsely claims that just 0.5 millimeters of Insultex foam provides 50.8 times the insulating power of standard insulating material and many multiples more insulation per inch than any other known insulation product. See https://www.energy.gov/energysaver/weatherize/insulation/types-insulation.

Unsurprisingly, independent testing by multiple qualified labs proves that Insultex does not have an R-value approaching anything near Defendant’s claims of R-3 and R-6, conclusively establishing the claims’ falsity. Dr. David Yarbrough, a world-renowned expert in the field of thermal insulation testing, explains that experts in the field rely on a testing standard, ASTM C518, to evaluate thermal performance of insulation. In fact, certain of IDI’s advertisements claimed R-values obtained by this very standard. ASTM C518 tests use a heat flow meter (“HFM”), which measures temperature difference and heat flow across a sample to determine a material’s R-value. Conducting the ASTM C518 test, Dr. Yarbrough found that the R-value of both Insultex products is below R-0.4, or 1000% lower than the claimed values. Nine additional independent labs, some of which IDI commissioned while selling its product with false R-value claims, confirm this result: 1) TA Instruments-Waters; 2) Netzsch Instruments; 3) Architectural Testing, Inc.; 4) Element Materials Technology; 5) SGS North America; 6) R&D Services, Inc.; 7) Intertek; 8) Materials Distributors Inc.; and 9) Vartest Laboratories, Inc.

Rejecting these scientific results, IDI commissioned a small water-testing facility with no previous heat transfer testing experience or training, BRC Laboratory, to build a HFM and conduct testing that would produce—at the cost of nearly $300,000—the results that IDI wanted: R-3 for its 1.0mm product and R-6 for its 1.5mm product. Even after inventing their own machine, BRC could not reach the results IDI wanted by testing the actual Insultex product. Instead, BRC and IDI devised a scheme that tested the R-value of an assembly consisting of Insultex sandwiched between two ¾-inch enclosed air spaces.

Including any air space in an ASTM C518 test alters the R-value results because air is a known insulator. Dr. Yarbrough explains that the thermal conductivity of air is one of the most well-known properties in science, and the thermal resistance of enclosed air spaces has been tested for more than half a century. He will further explain that based on the prolific scientific exploration of this area, one can predict with a reasonable degree of scientific certainty that the ¾-inch air spaces constitute the majority of the R-values claimed by IDI. Claiming the R-value of Insultex alone, as IDI does, without properly accounting for the R-value of the two ¾-inch air spaces in its testing assembly lacks a reasonable technical basis, is improper, and misleads consumers. This is akin to buying a one-pound box of chocolates, only to learn that the seller arrived at its one-pound claim by using a 15-ounce box containing a single, one-ounce chocolate, instead of multiple chocolates that weighed one pound independent of the box.