ACQUIRED TECHNOLOGY

9 Months Ended

Sep. 30, 2012

ACQUIRED TECHNOLOGY [Abstract]

ACQUIRED TECHNOLOGY

6. ACQUIRED TECHNOLOGY

In 2000, the Company entered into a license agreement with Motorola whereby Motorola granted the Company perpetual license rights to what are now 74 issued U.S. patents relating to Motorola's OLED technologies, together with foreign counterparts in various countries. These patents expire in the U.S. between 2014 and 2018.

The Company was required under the license agreement with Motorola to pay Motorola annual royalties on gross revenues received on account of the Company's sales of OLED products or components, or from its OLED technology licensees, whether or not these revenues related specifically to inventions claimed in the patent rights licensed from Motorola.

On March 9, 2011, the Company purchased these patents from Motorola, including all existing and future claims and causes of action for any infringement of the patents, pursuant to a Patent Purchase Agreement.  The Patent Purchase Agreement effectively terminated the Company's license agreement with Motorola, including any obligation to make royalty payments to Motorola.

The technology acquired from Motorola had an assigned value of $440,000 as of March 9, 2011, which is being amortized over a period of 7.5 years.

On July 23, 2012, the Company entered into a Patent Sale Agreement (the Agreement) with FUJIFILM.  Under the Agreement, FUJIFILM sold approximately 1,255 OLED (organic light emitting diode) related patents and patent applications in exchange for a cash payment of $105.0 million.  The Agreement contains customary representations and warranties and covenants, including respective covenants not to sue by both parties thereto.  The Agreement permitted the Company to assign all of its rights and obligations under the Agreement to its affiliates, and the Company assigned, prior to the consummation of the transactions contemplated by the Agreement, its rights and obligations to UDC Ireland Limited ("UDC Ireland"), a wholly-owned subsidiary of the Company formed under the laws of the Republic of Ireland.  The transactions contemplated by the Agreement were consummated on July 26, 2012.

The Company recorded the $105.0 million plus $4.1 million of costs as acquired technology which is being amortized over a period of 10 years.  The total amortization expense for the three and nine month periods ended September 30, 2012 associated with the acquired technology is $2.1 million, and is included in the patent costs and amortization of acquired technology expense line item on the Consolidated Statements of Comprehensive (Loss) Income.

Amortization expense related to acquired technology is currently expected to be as follows (in thousands):

.	Year	Projected Expense
	2012	$     4,868
	2013	10,969
	2014	10,969
	2015	10,969
	2016	10,969
	Thereafter	60,749
		$109,493