Patents and Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

Note 4 – Patents and Other Intangible Assets

Patents and other intangible assets are summarized as follows:

	September 30,		December 31,
	2016		2015
	(unaudited)
Patents
Patents pending	$	1,216,000	$	2,730,000
Issued patents		490,000		115,000
		1,706,000		2,845,000
Trademarks
Trademarks pending		20,000		18,000
Registered trademarks		23,000		23,000
		43,000		41,000
Other		8,000		8,000
		1,757,000		2,894,000
Accumulated amortization		(60,000)		(13,000)
	$	1,697,000	$	2,881,000

The Company reassessed its patent portfolio in order to ensure that both the cost-effectiveness and the value created through the intellectual property portfolio were maximized and to focus resources on its most promising patents. Those patents considered to be the most beneficial were retained and those pending patents projected to be unnecessarily costly that could be disposed of without meaningfully degrading the quality of the remaining intellectual property portfolio were abandoned. Further, an impairment loss was recorded for certain other patents pending which are believed to be of diminished value, but in the judgment of management remain worthwhile to continue to pursue until the product attributes and related reasonable patent protection can be better determined. As a result, during the three and nine months ended September 30, 2016 and 2015, the Company recorded impairment losses of $1,739,000, $1,971,000, $0 and $5,000, respectively, of capitalized patents pending.

A reconciliation of patent activity for the quarter ended September 30, 2016 is summarized as follows:

	Duplex		ECC		Total
Balance at July 1, 2016	$	1,433,000	$	1,831,000	$	3,264,000
Current Costs		112,000		69,000		181,000
Abandonments and Impairments		(682,000)		(1,057,000)		(1,739,000)
Balance at September 30, 2016	$	863,000	$	843,000	$	1,706,000

Future amortization expense associated with issued patents and registered trademarks as of September 30, 2016 is estimated as follows:

2016	$	25,000
2017		93,000
2018		93,000
2019		93,000
2020		91,000
Thereafter		58,000
	$	453,000