A patent is a government-granted, time-limited exclusive right awarded to an inventor or assignee that prevents others from making, using, selling, or importing the patented invention without authorisation for a specified period — typically 20 years from the filing date in India under the Patents Act, 1970. Patents provide inventors and companies with a temporary legal monopoly over their innovations, allowing them to recoup R&D investment through exclusive commercialisation. In financial terms, patents are intangible assets that can be capitalised on the balance sheet when acquired through purchase or business combination, and are a critical component of competitive moat — particularly in pharmaceutical, biotechnology, semiconductor, and technology sectors. In the Indian pharmaceutical industry, patent expiries on branded drugs are significant events that open markets to generic competition, driving down drug prices and impacting pharma company revenue streams. For investors on Ventura Securities evaluating R&D-intensive companies, patent portfolios, upcoming patent cliffs, litigation risks, and new patent filings are among the most important factors shaping long-term competitive positioning and earnings sustainability.
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