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COMMENT: The automation market is changing. It is now being driven by new technology, new players and consumers who are demanding more than an entry level system.
What consumers want today is a combination of home automation capability spanning distributed audio, content management, lighting control, security and above all connectivity to a fast broadband network which allows for the introduction of such services as wireless automation and voice over IP services.
Distributed audio which allows sound to be distributed from one room to another from one source and accessed by a remote control is hot. So is a new generation of lighting control systems with manufacturers like Vantage, Lutron and Dynalite delivering a new generation of advanced capability.
Then there is the likes of Control 4 which is selling a new system based around Zigbee technology. Also making an impression in the market is PDL which manufactures not only lighting automation technology but a new generation of audio distribution system.
In the past many lighting and home automation systems have been based around the common old C Bus system from Clipsal, a French owned company that has traditionally sold its C Bus system and other Clipsal electrical products via electricians and specialist installers.
The only problem in having an electrician install a lighting control and home automation system is that today, automation systems need to be integrated, programmed and configured by highly skilled installers who are able to not only program the lighting software, but integrate hand held controllers so that everything works seamlessly alongside the audio distribution system, the security system, a new generation of IP controlled devices, such as a media centre or IP based receiver as well as IP based phone systems.
Electricians are very good at laying cables and connecting a C Bus system to the end of the cable, but not very good at integrating and programming other technology to work with the C Bus system.
What is happening now, is that new automation technology is being introduced to compete with the C Bus system and these systems are taking share away from Clipsal because they deliver a far superior automation solution.
This in part has come about because of the competitive nature of the Australian automation market Vs overseas markets like the US, where home automation is far more advanced than here. This has forced manufacturers like Lutron, Vantage, Crestron and AMX to fast develop new automation systems that allow for the integration into their control systems of additional capabilities such as IP based systems linked into computer networks. Wireless based technology and open standard based technology.
While the C Bus system is excellent as an automation system, several of the specialist installers are gravitating to solutions from the likes of Dynalite, a local Australian company, Lutron and new comer Vantage as they allow for greater connectivity.
This has upset Clipsal, a company which has had the automation market to themselves for a long time. Now they are facing tough competition from a host of competitors including fellow Adelaide company Hills, which recently poached the former General Manager of Clipsal’s automation division Steve Cope to head up a fast growing new division at Hills that is set to take Clipsal head on in several areas.
Well known for its bullying tactics, Clipsal has taken to singling out resellers who have switched to other brands for a visit. They are demanding to know why in no uncertain terms. On another occasion a leading electrical industry magazine ran electrical controller advertising for a Clipsal competitor with pricing. Suddenly Clipsal advertising stopped appearing in the magazine.
A division of the giant French Company Schneider Electric ,Clipsal is currently facing court action in the Australian Federal Court accused of systematically stealing automation technology from as far back as the early 1990s. Now a small Perth based technology wants $2billion dollars in back payments.
In late 2003, the Clipsal brand was sold by Gerard Industries to Schneider Electric the world’s biggest electrical company. Clipsal is now a major player in global markets with the C Bus system generating million in revenue.
The Perth technology firm called Smart Company have told the Federal Court in Adelaide that Clipsal, which the Gerard Family sold in 2003, had been stealing technology since the late 1990s and had failed to pay up to $2billion in licence fees. Smart Company accuses Clipsal of breaching a technology-sharing agreement signed in 1996, and using the technology in one of Clipsal’s most successful products, the C-Bus II home automation system.
According to the Australian newspaper, Robert Gerard a friend of the Prime Minister and former owner of Clipsal has been drawn into the $2 billion court dispute and could soon find himself in the dock being quizzed by lawyers for Smart Company. Early in 2006 Robert Gerard was forced to resign as a Reserve Bank board member after revelations of a multi-million-dollar tax dispute.
When Clipsal was sold to Schneider Electric Mr Gerard was chairman of Clipsal, his son Simon Gerard was general manager and nephew Jason Gerard was head of research and development. Jeremy Roberts of the Australian newspaper is covering the case. He wrote, “Documents in the court file reveal that Simon Gerard and Jason Gerard were intimately involved in fighting the dispute from 2002.”
And they show that when the Gerard family decided to sell its controlling share of Clipsal to a French multinational in August 2003, the dispute escalated into a court action. The sale reaped $375 million for the Gerard family, whose ancestor Alfred Gerard started the company in 1920 as an electrical fittings maker.
Simon Gerard stayed on as general manager of Clipsal until February this year. Jason Gerard, Simon Gerard and Rob Gerard now work at the family company Gerard Corporation and have no major shareholding in Clipsal. Clipsal’s new owner, Schneider Electric, is now dealing with the Smart Company litigation.
“It is a case of considerable scope and substance and each party will incur considerable costs in fighting it,” counsel for Clipsal Richard Cobden told the Federal Court on July 17.” Although presently the damages are not particularised in the statement of claim, they were in the first version of the statement of claim particularised at some $2 billion.”
The case has been crawling through the Federal Court for more than a year as Clipsal tried to convince the court that the owners of Smart Company could not afford to fight it.
In December 2001, Smart Company entered voluntary administration and was bought the following year by expatriate Greek entrepreneur Sotirios Portellos, who lives in Adelaide.
He and two other directors have signed “guarantees” for the court valued at more than $1 million, made up of property in Australia and Greece, cash, cars, investments and an opal collection.
The executive general manager of Clipsal, Erik Scholz, declined to return calls or reply to emailed questions about the case. The Gerards also refused to comment on the case.
The Federal Court file runs to thousands of pages. It includes an affidavit dated March last year by Jason Gerard, which shows him refusing to dig up documents requested by Smart Company.
“From my extensive knowledge of the records of Clipsal which comprises design briefs … schematic diagrams … I estimate that the volume of documents which relate to the development (of C-Bus II) is in excess of 85,000,” he said. “The task (of discovering those documents) would take many, many months and thousands of man hours.”
According to the minutes of a May 2004 meeting, Simon Gerard advises Smart “not to worry” about their concerns and that they should “move on”. In a letter from Simon Gerard in the same month he says: “Our lawyers have advised that Smart has absolutely no rights to the C-Bus technology and we therefore regard your claims to be misconceived and spurious.” the court case is set to continue.
When SmartHouse News first ran this story Clipsal management phoned 4Square Media demanding that we remove the story despite the fact that the story was also being covered by the national media. “You have no right to run the story we advertise with you and if you don’t pull the story down we will stop all advertising” they said.
