Acquired Patents And Other Intangibles

3 Months Ended

Sep. 30, 2011

Acquired Patents And Other Intangibles [Abstract]

Acquired Patents And Other Intangibles

Note 6 – Acquired Patents and Other Intangibles

The costs of internally developed patents are expensed when incurred due to the long development cycle for products and the Company's inability to measure the recoverability of these costs when incurred. From time to time, the Company has acquired portfolios of patents and other intangibles that it believes are beneficial and complementary to the Company's existing intellectual property and material processing knowledge platform. These acquisitions have included a portfolio of puncture closure patents acquired in November 1997, patents acquired in the asset purchase of THM Biomedical, Inc. (THM) in 2000, certain intellectual property and other rights related to the Vitoss^™ product line acquired from a third party inventor in 2004 (See Note 4), and certain assets of MacroPore Biosurgery, Inc. (MacroPore) acquired in 2007, as well as other smaller purchases.

In fiscal 2011, the Company acquired the following intangible assets:

On December 21, 2010, in addition to making a non-controlling minority equity investment in Orteq Ltd. (Orteq Sports Medicine or Orteq) (see Note 7), the Company entered into a manufacturing and supply agreement with Orteq and acquired the exclusive worldwide manufacturing rights of the Actifit^® (Actifit) product line for a period of 10 years beginning with the date of its first U.S. commercial sale. The Company assigned $1,632 to the cost of the manufacturing rights and related costs associated with the transaction. Actifit is a biocompatible synthetic meniscal scaffold, which received its CE Mark approval in 2008 for the treatment of irreparable partial meniscal tears and is currently being sold throughout Europe. The acquired manufacturing rights are expected to be amortized over the estimated period of economic benefit of approximately 12 years and amortization is expected to begin when the Company begins to manufacture and sell the Actifit product line.

On January 28, 2011, the Company acquired certain intangible assets of Nerites through an asset acquisition transaction (see Note 5). The Company assigned $1,813 of the total acquisition costs to the intangible assets, which will be amortized over the estimated remaining period of economic benefit ranging from 2 to 25 years, depending on the intangible asset.

On May 24, 2011, the Company acquired an intangible asset (customer relationship) of Norian through the Norian asset acquisition transaction (see Note 5). Under the purchase method of accounting, the Company assigned $13,790 of the total purchase price to the intangible asset (customer relationship), which will be amortized over the estimated remaining period of economic benefit of 15 years.

The Company amortizes the entire cost of acquired patents and intangible assets over their respective estimated remaining periods of economic benefit, ranging from approximately 1 to 25 years as of September 30, 2011. The gross carrying amount of such patents and intangible assets as of September 30, 2011 was $25,913, with accumulated amortization of $8,177. The gross carrying amount of such patents and intangible assets as of June 30, 2011 was $25,913, with accumulated amortization of $7,731.

Amortization expense on these patents and intangible assets was $446 and $239 for the three months ended September 30, 2011 and 2010, respectively.

The table below details the estimated amortization expense as of September 30, 2011 for the next five fiscal years on the patents and intangible assets acquired by the Company:

Fiscal year ending June 30,	Amortization Expense
2012	$	1,732
2013		1,362
2014		1,323
2015		1,143
2016		1,125
Thereafter		11,496