Case 10-1 Essay

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Cases • Case 10-1 On June 30, 2006, your client, the Vandiver Corporation, was granted patents covering plastic cartons that it has been producing and marketing profitably for three years. One patent covers the manufacturing process and the other covers the related products. Vandiver executives tell you that these patents represent the most significant breakthrough in the industry in the past thirty years. The products have been marketed under the registered trademarks Safetainer, Duratainer, and Sealrite. Licenses under the patents have already been granted by your client to other manufacturers in the United States and abroad and are producing substantial royalties. On July 1, 2006, Vandiver commenced patent infringement actions against several companies whose names you recognize as those of substantial and prominent competitors. Vandiver’s management is optimistic that these suits will result in a permanent injunction against the manufacture and sale of the infringing products and collection of damages for loss of profits caused by the alleged infringements. The financial executive has suggested that the patents be recorded at the discounted value of expected net royalty receipts. What is an intangible asset? Explain. An intangible asset is an asset that cannot be seen or touched or physically calculated. It is considered a separate asset; intangible assets are things such as corporate intellectual property like copyrights, patents and trademarks as well as know-how actions (human capital). Intangible assets are an asset that is not substantial in character. Goodwill is also a part of intangible assets, goodwill takes part in only when an asset is purchased and signifies the cash a business has paid or is going to pay over its book value to get another asset. Although intangible assets do not have physical value, they can demonstrate to be very constructive

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