<SEC-DOCUMENT>0001193125-10-290298.txt : 20110307
<SEC-HEADER>0001193125-10-290298.hdr.sgml : 20110307
<ACCEPTANCE-DATETIME>20101229164734
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-10-290298
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20101229

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KOPIN CORP
		CENTRAL INDEX KEY:			0000771266
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				042833935
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		695 MYLES STANDISH BLVD
		CITY:			TAUNTON
		STATE:			MA
		ZIP:			02780
		BUSINESS PHONE:		5088246696
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
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<TITLE>Letter to the SEC</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">December&nbsp;29, 2010 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>VIA EDGAR AND FEDERAL EXPRESS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Jeff Jaramillo </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Division of Corporation Finance </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accounting
Branch Chief </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Securities&nbsp;&amp; Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">100 F Street N.E. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington, D.C. 20549 </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Re:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Kopin Corporation</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Form 10-K for the Fiscal Year Ended December 26, 2009</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Filed March 8, 2010</B></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>File No. 000-19882</B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Mr.&nbsp;Jaramillo,
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This letter is in response to comments received in the letter dated December&nbsp;17, 2010 (the &#147;Letter&#148;) from the
Staff (the &#147;Staff&#148;) of the Securities and Exchange Commission (the &#147;Commission&#148;) to Richard A. Sneider, Chief Financial Officer of Kopin Corporation (&#147;we&#148;, &#147;our&#148; or the &#147;Company&#148;). We have reviewed
the Letter and our response is set forth below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">For ease of reference the comment contained in the Letter is printed below in
italics and is followed by our response. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1<I>. We note your disclosure that there &#147;no significant changes were made to our internal
controls during our fourth fiscal quarter.&#148; Item&nbsp;308(c) of the Regulation S-K requires you to disclose <U>any change</U> in your internal control over financial reporting that occurred during your last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, your internal control over financial reporting. Please confirm for us in your response whether they were any changes required to be disclosed by Item&nbsp;308(c) of Regulation S-K for the
fiscal quarter ended December&nbsp;26, 2009. In addition, please also revise future filings to disclose any changes that meet the requirements of Item&nbsp;308(c) of Regulation S-K.</I> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Response: </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As requested by the Staff, we confirm that there were no changes
required to be disclosed by Item&nbsp;308(c) of Regulation S-K for the fiscal quarter ended December&nbsp;26, 2009. Assuming no changes have occurred, we will provide disclosure in future filings as follows: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;During our last fiscal quarter, there were no changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.&#148; </I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I></I>2. <I>We noted that
you recorded $6.3 million of income from the sale of patent license fees in fiscal 2009. Please revise your disclosures in future filings to include greater detail about the material terms of the patent sale agreements whereby you sold the patents
and recognized income based on sublicensing of those patents. Please also discuss the cost basis and expenses underlying the </I></FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>
transaction, how the gross or net amount of the income was calculated and why the presentation of the item as a component of non-operating income was appropriate. Finally, provide us with a draft
of the changes you plan to make to your future disclosures in response to our comment. </I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Response: </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In our 2009 Annual Report&#146;s Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations under the
Other Income and Expense section and in Note 3 to the Consolidated Financial Statements we stated the following to describe the $6.3 million of Gain on sale of Patents shown in Other income and expense in our 2009 Consolidated Statement of
Operations: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>In fiscal year 2008 we entered into an agreement wherein we agreed to sell certain patents we were no longer
using to a party which would attempt to sub-license the patents. Under the terms of the agreement the amount we would receive for the sale of the patents was a percentage of any license fees, after expenses, from the sublicense. In 2009 we recorded
$6.3 million of license fees from the sale of these patents. We do not expect to receive any material additional amounts from the sales of these patents</I>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">As noted in our disclosure, we sold certain patents which we were no longer using to a third party (the &#147;Buyer&#148;). Beyond the standard terms (governing law, confidentiality, notices, etc&#133;),
the key terms of the agreement to sell the patents (the &#147;sales agreement&#148;) were as follows: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The initial consideration Kopin received was $1. We were not guaranteed to receive any additional consideration. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company would receive additional consideration consisting of a percentage of any net proceeds that the Buyer received for sublicensing the patents
or any legal settlement received from companies that were infringing in the patents. Under the sales agreement the Buyer was allowed to reduce any proceeds received by the costs incurred, primarily legal costs, to arrange for sublicensing or
prosecute any patent infringements. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company warranted that it owned the patents and had not licensed them to any other third parties. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">After two years and if the Buyer had not generated any additional consideration the Company had the option to buy the patents back for the initial
consideration. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I><U>Recognition</U> </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In determining whether recognition of income upon the consummation of the sales agreement was appropriate, we evaluated the terms and
conditions. Specifically, Kopin had no obligation to perform any services or provide any additional support to the Buyer under the sales agreement after the transaction was completed. Additionally, the cash received by Kopin in the amount of $6.3
million in 2009 was non-refundable, except if we violated the warranties described in the third bullet point above. Any rights maintained by Kopin in connection with the sales agreement were protective in nature. Our conclusion to recognize the
income from the sale of patents on a cash basis was based on collective terms of the sales agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The technology covered
by the patents sold was internally developed many years earlier and the costs incurred to develop the technology had been expensed as research and development. The technology was never used in a product that generated any economic benefit to Kopin.
The </FONT></P>

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accumulated costs for patent maintenance had been expensed in prior periods. Accordingly, upon consummation of the sales agreement, the carrying value of the patents was $0 and the gain on the
sale of patents as presented in our 2009 Consolidated Statement of Operations represents the cash received during 2009. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I><U>Presentation</U> </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In item 1 Business of our Part 1 of our Form 10-K we describe our business as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>We were incorporated in Delaware in 1984 and are a leading developer and manufacturer of III-V products and miniature flat panel displays. We use our proprietary semiconductor material technology to
design, manufacture and market our products. </I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our revenues are generated from the sale of semiconductor products or the
performance of research and development contracts, primarily for the U.S. Department of Defense. While we have previously licensed technology upon the establishment of joint ventures, we have not historically engaged in the sale or licensing of
patents to unaffiliated third parties. As noted above, the technology subject to the patents was never used in a commercial product or arrangement. These patents were effectively idle assets, not assets used in operations, for which no commercial
application had been developed by Kopin. Accordingly we did not consider the gain on the sale to be income for our normal operations and concluded that presentation as other income below income from operations was more appropriate. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In future filings we plan to include the following revised disclosure: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>In fiscal year 2008 we entered into an agreement to sell certain patents which we were not using and that had a carrying value of $0 to
a buyer who would attempt to sublicense the patents. The total consideration the Company would receive for the sale of the patents would be a percentage of any sublicense fees, after expenses, the buyer received. In 2009 we recorded $6.3 million of
income which represented the Company&#146;s share of sublicense fees income. We do not expect to receive any material additional amounts from the sales of these patents</I>. <I>However, we do continue to evaluate the patents in our portfolio for
opportunities to moneterize these assets. </I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company hereby acknowledges the following: </FONT></P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the company is responsible for the adequacy and accuracy of the disclosure in the filings; </FONT></P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the
filings; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of
the United States. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We would appreciate the opportunity to discuss any remaining questions or concerns with you at your
convenience. If you have any further questions, please contact the undersigned at 508.824.6696. </FONT></P>

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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Very truly yours,</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Richard A. Sneider</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Richard A. Sneider</FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cc:</FONT></TD>
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<TD VALIGN="bottom" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">Kevin Kuhar, <I>U.S. Securities and Exchange Commission</I></FONT></TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">John, J. Concannon, <I>Bingham McCutchen LLP</I></FONT></TD></TR></TABLE>
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