SPIN-OFFS: THE COMPANIES OF SCIENTIFIC INNOVATION

Research Spin-Off Companies under Law 4864/2021 and the New Legal Framework for Commercialising Innovation in Greece

Introduction: From Research to Market

The commercial exploitation of scientific knowledge has become one of the most decisive drivers of modern economic growth, particularly in the fields of deep tech, applied research, and innovation-driven entrepreneurship. Within this evolving landscape, research spin-off companies constitute the primary legal and organisational vehicle through which publicly generated research outcomes are transferred to the market.

Με το Law 4864/2021, the Greek legislator introduced a comprehensive reform of the institutional framework governing Research Spin-Off Companies (Technology Spin-Offs), incorporating comparative elements from mature international technology-transfer models and adapting them to the structural and constitutional specificities of the Greek legal order.

Since 2021, the number of spin-offs established by researchers of Greek Universities and Research Centres has increased exponentially, confirming that the spin-off institution is emerging as a cornerstone of the Greek innovation economy and a key mechanism for attracting investment, fostering applied research, and retaining high-value scientific capital within the country.

THE STRUCTURAL ELEMENTS OF A SPIN-OFF

1. The Spin-Off Institution in International Practice and Its Role in the Deep-Tech Economy

Internationally, spin-offs represent the preferred technology-transfer mechanism between the public research sector and the private market. The establishment of a Special-Purpose Commercial Company is required in order to:

• overcome the institutional inability of public research bodies to engage directly in commercial activity,

• enable private investment and risk-sharing,

• ensure operational flexibility,

• isolate entrepreneurial risk from public entities, and

• facilitate the structured exploitation of intangible assets.

The minimum functional characteristics of a spin-off include:

• a clearly defined commercial purpose,

• identified intellectual property or proprietary know-how,

• a distinct corporate and governance structure, and

• accountability mechanisms vis-à-vis the public research body of origin.

Law 4864/2021 adopts this logic by introducing a hybrid regulatory model, combining elements of corporate law with administrative and public law safeguards.

2. Establishing a Spin-Off in Greece – Founding Researchers and Required Approvals

Who May Establish a Spin-Off

The law adopts a broad definition of the term “researcher”, encompassing:

• faculty members,

• researchers employed by research centres,

• contractual researchers, and

• additional optional categories, subject to specific conditions.

A particularly important provision concerns researchers holding a public-law employment relationship, who are required to conduct any entrepreneurial exploitation of research results exclusively through a spin-off, thereby preventing informal or unregulated commercial activities.

Approval by the University or Research Centre

The establishment of a spin-off is subject to prior approval by the competent University or Research Centre. This approval:

• constitutes an administrative act,

• must be specifically reasoned, and

• is issued following an opinion by the competent advisory body.

Defective reasoning or procedural shortcomings may render the approval annullable, exposing the spin-off and its investors to significant legal uncertainty.

3. The Legal Relationship between the Spin-Off and the Public Research Body

The Technology Spin-Off Agreement

At the core of the institutional framework lies the Technology Spin-Off Agreement, which:

• is mandatory,

• is initially concluded by the founders and binds the company by way of universal succession upon incorporation,

• has a maximum duration of ten (10) years, with potential continuation under specific conditions.

The minimum content of the agreement includes:

• the scope of commercial exploitation,

• the terms governing intellectual property use or transfer,

• financial consideration payable to the public body,

• reporting and accountability obligations.

4. Spin-Offs and Intellectual Property

Intellectual property constitutes the core commercial asset of a spin-off. The law distinguishes between:

• industrial property (patents, technical inventions, industrial designs), and

• copyright or method-based intellectual property, which may evolve into trade secrets of the new company.

Key legal issues include:

• licensing versus assignment,

• exclusivity clauses,

• ownership of future intellectual property arising from the researcher-founder’s activity,

• rights of third-party IP holders not participating as founders.

The distinction between obligatory (preliminary) and dispositive (transfer) legal acts within the Technology Spin-Off Agreement is often decisive for both legal certainty and investment attractiveness.

THE CHALLENGES OF SPIN-OFFS

1. Investing in Spin-Offs – Legal and Transactional Challenges

Investment in spin-offs requires specialised legal due diligence, particularly with regard to:

• the validity and scope of intellectual property rights,

• the legality of approval procedures,

• the enforceability of licensing or transfer arrangements.

The valuation of an investor’s participation depends not only on financial projections, but also on:

• the duration and exclusivity of IP exploitation rights,

• the level of involvement of the University or Research Centre in the company.

2. The University as Shareholder – Rights, Controls and Limits

Where the University or Research Centre participates in the share capital of the spin-off:

• governance and reporting rights arise,

• veto or blocking rights may be established,

• a grey regulatory zone emerges between corporate autonomy and public-law oversight.

The exercise of these rights must balance:

• the protection of the public interest,

• the operational flexibility necessary for entrepreneurial success.

3. Conflicts of Interest and the Multiple Roles of Researcher-Founders

Researcher-founders frequently operate in overlapping roles involving:

• ongoing research activity,

• managerial or advisory involvement in the company,

• use of public infrastructure,

• generation of new intellectual property.

Absent clear contractual and regulatory solutions, these overlaps may generate conflicts of interest and legal uncertainty.

4. Internal Regulations – Regulatory Dilemmas and Legal Boundaries

Law 4864/2021 allows internal regulations to govern the establishment, but not exhaustively the operation, of spin-offs. Stricter internal rules:

• must respect the principle of proportionality,

• may not undermine the functional independence of the company.

Συμπέρασμα

Research spin-offs under Law 4864/2021 represent a structural instrument for the transformation of the Greek economy into a knowledge- and innovation-driven model. Their success, however, depends on sophisticated legal structuring, capable of reconciling:

• corporate law with administrative oversight,

• private investment with public accountability,

• scientific creativity with market-driven execution.

Δικηγορικό γραφείο provides comprehensive legal support to researchers, universities, research centres, and investors throughout the entire life cycle of a spin-off, from regulatory design and incorporation to investment structuring and growth, offering strategic, transaction-ready legal expertise at the intersection of innovation, technology, and law.