2.	Comment: Your proposed disclosure in response to prior comment 2 continues to refer to modified payments to your agreement with Video con, without clarifying why or how those modifications occurred. Please expand your disclosure to discuss how and why these payments were modified to be "more closely aligned with progress being made." Clarify Copytele's limited performance requirements under the agreement and explain in greater detail the technical support that has and will be provided to Videocon's technical team. Given that the license fees account for a significant portion of your revenues and that future modifications of the timing of the payments and delays in the payments beyond the 27 month period could materially impact your results of operations, please ensure that you describe the provisions of the license agreement that allow for modifications or adjustments to the payments. Further, you state that Videocon did not become a related party until it purchased the equity interest in November 2007. Please note that Item 404(a) of Regulation S-K requires disclosure of any transaction since the beginning of the last fiscal year in which a person identified in Item 404(a) of Regulation S-K was or is to be a participant and the amount involved exceeds $120,000, irrespective of when the contract was originally formed.
	Response:  Disclosure has been added to “Item 1. Business” and in “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – General” and “ --Liquidity and Capital Resources” to clarify how and why CopyTele agreed to defer the license payments and to explain in greater detail Videocon’s performance requirements under the License Agreement.
	Disclosure has been added to “Item 1. Business” and “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – General” and “ --Liquidity and Capital Resources” to clarify that  the deferrals were not required by the terms of the License Agreement, but rather were jointly agreed to by the parties in light of the additional time and effort required to incorporate improvements into the product.
	Disclosure has been added to “Item 13.  Certain Relationships and Related Transactions, and Director Independence” to provide the material economic terms of the license agreement with Videocon and a copy of such license agreement is being refiled with Amendment No. 2 without redacting such material economic terms.

 

 

3.	Comment:  We note that you have received several modified payment amounts under the license agreement with Videocon, yet your disclosure does not describe how or why each of those modifications was made. As requested above, please expand your disclosure accordingly. Although the $11 million total amount due under the license agreement has not changed, it is unclear from your disclosure when and how the remainder of this obligation will be paid. Specifically, tell us the dollar amount of license fees expected to be received in the twelve months from the filing date of the Form 10-K and also, what consideration you have given to adding more specific disclosure as to the uncertainty of receipt of the future license payments.
	Response:  The disclosure in “Item 1. Business” and “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – General” and “ --Liquidity and Capital Resources”  has been updated as set forth above in the response to Comment No. 2, to more fully describe how and why CopyTele agreed to defer the license payments.  The modification letters were filed as exhibits to the Company’s most recent Form 10-Q.   As set forth above in the response to Comment No, 2, such disclosure also includes information as to the amount of the license fees received to date.  As noted  in the above disclosure, CopyTele is currently unable to estimate when the remaining unpaid portion of the license fees will be paid.  However, CopyTele has not assumed receipt of such proceeds for the purposes of projecting cash flow needs for the 12 months ending January 31, 2011 and the disclosure has been be added to “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations –Liquidity and Capital Resources” to indicate that CopyTele has not identified any uses for such proceeds.

 

 

4.	Comment: Your response to prior comment 6 indicates that you have relied upon the information provided in Schedule 13G filed by Mars Overseas Limited; however, Instruction C to Schedule 13G requires disclosure pertaining to each executive officer and director of a corporation if a corporation is the reporting entity. There are similar disclosure requirements if the reporting entity is either a general or limited partnership. As such, the Schedule 13G should include the required  disclosure. Accordingly, we do not believe the prior comment has been satisfactorily resolved and we will contact you to discuss this matter further.
	Response:  Footnote 3 to the beneficial ownership table has been revised to reflect the identities of the natural persons who control Mars Overseas Limited (“Mars Overseas”) or otherwise have shared or sole voting power over the Company shares held by Mars Overseas Limited as information as provided in Amendment No. 1 to the Schedule 13G which Mars Overseas Limited filed with the Securities and Exchange Commission on May 17, 2010.

 

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It is responsible for the adequacy and accuracy of the disclosure in the filing;

 

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Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

 

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It may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

 

 

 

	Sincerely,
	/s/ Denis A. Krusos
	Denis A. Krusos
	Chairman of the Board and
	Chief Executive Officer

 

cc:	Stephani Bouvet / Securities and Exchange Commission
	Michael D. Schwamm, Esq./Duane Morris, LLP