State Aid Rules Are Slowing IP Commercialisation, According to Universities

The EU’s state aid rules, designed to prevent unfair competition through public subsidies, are increasingly viewed as a barrier to innovation, especially when it comes to commercialising intellectual property (IP) developed at universities. 

Under current regulations, public institutions must ensure that any transfer of IP to a company, whether a spin-out or an external partner, is done at fair market value. Otherwise, it could be considered unlawful state aid. But for early-stage IP, establishing market value is complex, and the required payments can be a major hurdle for young companies. 

The rules also restrict the total amount of state aid a company can receive under the de minimis regulation to €300,000 over three years. Many start-ups, especially in deep tech, reach this limit quickly through research and development (R&D) grants alone. Add the high costs of patenting, licensing, and access to university labs or infrastructure, and the financial pressure intensifies. 

These constraints are particularly challenging for university spinouts, which rely heavily on public support in their early stages. Beyond financial costs, universities must also account for non-financial contributions, like access to equipment or researcher time, adding to the administrative burden and slowing down deal-making. 

University leaders are calling for more flexible and clearer state aid rules to reduce legal uncertainty and make it easier to collaborate with industry—particularly for early-stage start-ups. The issue has reached the political level, with Commission president Ursula von der Leyen acknowledging the need for faster, more flexible rules. As Europe aims to boost innovation in IP-driven sectors, updating these regulations will be essential to unlocking the full value of research.