Other Intangible Assets

6 Months Ended

Jun. 30, 2013

3. Other Intangible Assets

Other intangible assets include patent application costs, 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:

		June 30, 2013						December 31, 2012
	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	$	1,365,917	$	1,039,383	$	2,405,300	$	1,243,865	$	1,161,435
Patent application costs	Varied (1)		1,009,220		311,672		697,548		956,714		265,472		691,242
		$	3,414,520	$	1,677,589	$	1,736,931	$	3,362,014	$	1,509,337	$	1,852,677

(1)- patent rights are amortized over their expected useful life which is generally the legal life of the patent. As of June 30, 2013, the weighted average remaining useful life of these assets in service was approximately 9.8 years.

Amortization expense for the six months ended June 30, 2013 amounted to $168,252 ($152,052 - 2012).

Approximate expected amortization for each of the five succeeding fiscal years is as follows:

2014	$	314,000
2015	$	314,000
2016	$	227,000
2017	$	189,000
2018	$	176,000