IPR Strategies | Patents as a Leading Indicator of Company's Market Performance

(17 March 2020) By the time a commercial product is launched on the market, it has already been patented for several years. Since innovative companies are more successful in the market, patent data can be a key indicator of innovation activity and therefore of market performance. According to IPR Strategies, patent shares perform better than an index. 

• Analyses of equal-weighted MSCI World Index shares overall compared with Patent shares (the top 30%, by patent leverage, of MSCI World Index shares with significant patent value) have shown that using patent data generates significant added value for share selection.

IPR Strategies' patent data can also provide indicators of changing ESG performance, helping to reveal companies’ ability to offer sustainable products and technologies in the future. The MSCI ESG ratings measure resilience to long-term, industry material environmental, social and governance (ESG) risks. Approximately 36% of all listed companies own ESG-related patents. Surprisingly, ESG-related patents’ average value is higher than that of patents overall; it is also increasing, in contrast to the value of non-sustainable patents. The scoring of sustainable patents can also be broken down according to individual UN SDGs (Sustainable Development Goals).