Careful documentation of inventive activity during the early stages of a spinout are important to avoid legal complications.
Patents can form an essential part of the commercial success of a spinout. Patents can give the company an exclusive right to its point of differentiation, creating barriers to entry that may block later competitors from selling the same goods or services. Those barriers to entry may free the spinout from price competition and increase market share, potentially increasing its value by multiples far in excess of values driven by other assets.
However, in order for them to be effective…
