Replies to post #396900 on Innovation Pharmaceuticals Inc (IPIX)

[Brinjal]

The money spent on obtaining a patent are not expensed in the year of spend. Instead, they are capitalized and appear on the asset side of the balance sheet, and carried forward amortizing it equally over the life of the patent. Writing off means, expensing (or amortizing) the full value carried on the balance sheet, thereby reducing your profits (or increasing your losses). The losses in turn are reduced from the Capital on your balance sheet. In short, minus on the asset side and minus on the liabilities side, thus balancing your balance sheet.

This is purely, an accounting treatment. Writing off has no impact on the ownership of the patent which continues to reside with the patent holder. Moreover, no one else can file for a patent for the same product because it will be treated as prior art, which is disallowed under the patent rules.

[loanranger]

I'm sure.
"Can you actually still own it without a patent?"
Yes. The patent was assigned to this Company and this Company still owns it.

"What are those patent costs then if not for maintaining our patent rights? For what exactly are these write-offs, then?"
Another poster did a good job explaining how patents are accounted for. Whether the assets are acquired (e.g. brilacidin) or developed the price paid or costs incurred can be expensed (aka written off) over the useful life of the patent.
When the decision was made to discontinue the development of K it effectively ended the useful life of the patent so the remaining asset was expensed.
Another company could be willing to try to develop the drug and acquire it from IPIX. Should that happen the price that they pay would essentially be pure profit (recorded as a gain) since all the costs have already been written off.

The only question for me is why write it off? The Company has no income so there's no tax benefit. Ongoing patent fees aren't material and there's no indication that the patent has been formally Abandoned anyway.