Patents are certainly indicative of innovation

Whilst clearly creating an “economic moat”, patent rights and especially granted patents are an excellent indicator of the level of innovation within a company. It seems reasonable to assume that, if a patent office examiner can be persuaded to grant a patent, the technology in question is demonstrably innovative over what has previously been on the market. Lots of caveats apply of course, but a company possessing many patent rights is probably leading on innovation rather than following.

These intangible assets underpin the product innovations that can drive a company’s profit growth long into the future

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