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Other Intangible Assets
 9 Months Ended
Sep. 30, 2012
Other Intangible Assets [Abstract]  
Other Intangible Assets

 

  3. Other Intangible Assets

 

Other intangible assets include patent application costs, which consist of costs associated with the application, acquisition and defense of the Company's patents, contractual rights to patents and trade secrets associated with the Company's technologies, customer lists and non-compete agreements obtained as a result of acquisitions. The Company's patents and trade secrets are for document anti-counterfeiting and anti-scanning technologies and processes that form the basis of the Company's document security business. Patent application costs are capitalized and amortized over the estimated useful life of the patent, which generally approximates its legal life. The Company accounts for other intangible amortization as an operating expense, unless the underlying asset is directly associated with the production or delivery of a product. Costs incurred to renew or extend the term of recognized intangible assets, including patent annuities and fees, are expensed as incurred. To date, the amount of related amortization expense for other intangible assets directly attributable to revenue recognized is not material.

 

Other intangible assets are comprised of the following:

        September 30, 2012     December 31, 2011  
    Useful Life   Gross Carrying
Amount		     Accumulated
Amortizaton		     Net Carrying
Amount		     Gross Carrying
Amount		     Accumulated
Amortizaton		     Net Carrying
Amount		  
Acquired intangibles   5 -10 years   $ 2,405,300     $ 1,182,839     $ 1,222,461     $ 2,405,300     $ 999,761     $ 1,405,539  
Patent application costs   Varied (1)     946,714       250,472       696,242       843,145       205,472       637,673  
                                                     
        $ 3,352,014     $ 1,433,311     $ 1,918,703     $ 3,248,445     $ 1,205,233     $ 2,043,212  

 

(1)- patent rights are amortized over their expected useful life which is generally the legal life of the patent. As of September 30, 2012, the weighted average remaining useful life of these assets in service was approximately 11.75 years.

 

Amortization expense for the nine months ended September 30, 2012 amounted to $228,078 ($205,416 - 2011). Approximate expected amortization for each of the five succeeding fiscal years is as follows:

 

2013   $ 295,000  
2014   $ 295,000  
2015   $ 210,000  
2016   $ 176,000  
2017   $ 163,000