Patent Velocity Acceleration
In plain terms
Companies whose patent filing rate is accelerating are investing more in innovation -- and the market is slow to price that in.
How it works
Acceleration in patent application filing rate (publications per quarter, change in slope) signals increasing R&D output intensity before the financial statements capture it. The market undervalues rising innovation velocity, particularly in mid-cap names where analyst coverage is thinner.
Data dependencies
- Daily prices
Adjusted-close OHLCV for every US-listed ticker; primary price feed.
- Uspto patent applications
A data feed this strategy reads, refreshed on its normal schedule.
Expected edge
- Reported return
- ~3-5% ann. long-leg
- Tested over
- 1980-2006 (Cohen-Diether-Malloy)
Patent velocity acceleration: ~3-5% annual alpha over the 12-month window post-signal.
Related families
Companies where the economic value of each new patent is rising (not just the count) compound innovation quality in a way the market underprices.
Companies that generate more patents per R&D dollar outperform those that spend heavily on R&D but produce fewer high-value patents.
Explore Patent Velocity Acceleration on alphactor.ai
See which tickers this family is currently firing on, with live signals and rankings.