Intangible assets as a moat

Brands, patents and regulatory licences that let a company charge more or keep others out.

A branded consumer product running an 11-point gross margin premium over an identical unbranded one is showing the brand's value in the only place it can be measured.

Patents expire, which makes them a clock rather than a moat, and the generic pharmaceutical industry exists entirely in the shadow of that expiry. Licences depend on a regulator's continued choice. Brands can last longest of all, and they decay quietly when the marketing spend that maintains them is cut to make a quarter.

Advertising as a share of sales, held steady over decades, is what a brand costs.