Intellectual property

Intellectual property is a creation of the mind, an invention, a brand, a piece of writing, a design, that the law lets a company own and control the use of. It is one specific type of intangible assets, the subset that comes from formal legal protection rather than from things like customer relationships or an acquired brand's reputation.

It typically falls into a few categories. Patents protect inventions and give the holder the exclusive right to make or sell them for a set period. Trademarks protect brand names, logos, and slogans. Copyrights protect original creative or written work. Trade secrets protect confidential information, like a formula or process, that a company chooses to keep undisclosed rather than patent.

For investors, intellectual property matters because it can be a durable source of competitive advantage. A strong patent portfolio can block competitors from copying a product outright, and licensing that intellectual property to others can become a profitable revenue stream in its own right. Not all intangible assets carry this kind of legal protection, which is why intellectual property is treated as its own concept rather than simply another word for intangible assets.