A Cautionary Story

PART - I: A Cautionary Story About a Restrictive Patent Clause - Would You Have Signed It?  (NEW blog! See PART - II below)

Hello, fellow researchers—whether you're new to the industry or have years of experience, I’d like to share an important lesson I learned about intellectual property (IP) agreements. I hope this helps you navigate similar situations in your career.

During my time with one of my previous employers, I encountered a contractual clause that raised some unexpected obligations. The contract included the following terms:

12.1 All materials and results created during the course of employment under this Agreement, along with all associated intellectual property rights, shall be owned by the Company.

12.3 If the Company so requests, the Employee agrees to assist in protecting, registering, maintaining, and fully utilizing the materials, results, and intellectual property rights described in Section 12.1. (Note: There was a typo in the contract—Section 10.1 should have been Section 12.1.)

Because of the wording—particularly the use of "assist"—it was interpreted to mean that I was required to sign additional agreements related to intellectual property. After reviewing the implications, I attempted to negotiate the terms. A revised version was proposed, but I still found certain aspects of the agreement potentially restrictive for my future work. One major aspect of that particular patent was that it was broad in scope, as it lacked specific details and covered a wide range of cases. Given this, I considered the patent and the agreement to potentially have a much broader reach.

Ultimately, I resolved the situation by clarifying my involvement and ensuring my name was correctly excluded from the specific patent in question. Interestingly, until I was asked to sign, I had not been involved in discussions about that particular patent.

This experience reinforced the importance of thoroughly reviewing every contract clause and seeking clarity on any ambiguous terms. Would you have signed these agreements? How closely do you read legal documents before committing to them?

v1

WORLDWIDE ASSIGNMENT DEED

I hereby declare that I have assigned to (below ASSIGNEE):

[...], registration no [...]

my invention and right to patents, in all countries worldwide, on said invention made by (below ASSIGNOR):

[...]

entitled "[...]", described in the Swedish patent application filed on [...] with the Application No. [...].

The assignment of the above-mentioned right to an invention is full and complete and includes a transfer of all rights to the patent application and any further patent applications claiming priority from the same, any priority rights related thereto, and any and all patents to issue therefrom, including any and all extensions, variations, or divisionals thereof, any utility model applications, design applications, and any and all Letters Patent(s), foreign or domestic, in all countries and under any applicable treaty or convention for the protection of intellectual property rights, including, without limitation, the Paris Convention for the Protection of Industrial Property.

The ASSIGNEE alone hereinafter has the entire disposal of the invention and possesses entire ownership of any and all patents and utility models applied for or granted thereon in all countries, including all rights to further assign, license, pledge, or otherwise encumber the same.

I, the ASSIGNOR, undertake to sign all documents necessary for the application and registration of any registered rights related to the invention, be it patents, registered design rights, or utility models, including all further documents that may be required to assert the rights transferred hereby. I also grant the ASSIGNEE the power to insert on this Assignment any further identification which may be necessary to identify the patent application.

If the ASSIGNOR is prevented by any obstacles from signing said documents in person, this document of assignment shall be valid as a Power of Attorney for the ASSIGNEE to sign these documents on behalf of the ASSIGNOR or, in the event of the death of the latter, the estate thereof.

v2

WORLDWIDE ASSIGNMENT DEED

I hereby declare that I have assigned to (below ASSIGNEE):

[...], registration no [...]

my invention and right to patents, in all countries worldwide, on said invention made by (below ASSIGNOR):

[...]

entitled "[...]", described in the Swedish patent application filed on [...] with the Application No. [...].

The assignment of the above mentioned right to an invention is full and complete and includes a transfer of all rights to the patent application and any further patent applications claiming priority from the same, any priority rights related thereto and any and all patents to issue therefrom including any and all extensions, variations or divisionals thereof, any utility model applications, design applications and any and all Letters Patent(s), foreign or domestic/in all countries and under any applicable treaty or convention for the protection of intellectual property rights, including without limitation the Paris Convention for the Protection of Industrial Property.

The ASSIGNEE alone hereinafter has the entire disposal of the invention and possesses entire ownership to any and all patents and utility models applied for or granted thereon in all countries, including all rights to further assign, license, pledge or otherwise encumber the same.

I, the ASSIGNOR, undertake to assist the ASSIGNEE, if the ASSIGNEE wishes so, on enabling the ASSIGNEE to protect, register, maintain and fully utilize the materials, results and intellectual property rights in and to materials and results created during the course of employment.

PART - II: A Look at Patent Trolls – Big Fish and Small Fish 

Hello again, fellow researchers. In Part I, I shared a cautionary story about restrictive patent clauses. In this section, I’d like to turn to another recurring theme in the world of intellectual property: patent trolls.

This term can mean different things, but one useful way to think about it is as “trolling between bigger and smaller players”—sometimes big companies use their size to pressure smaller ones, and sometimes small companies use timing and broad claims to pressure larger firms. Both situations illustrate how fragile the balance of innovation and litigation can be.

When Big Companies Troll Small Ones

Large corporations hold vast patent portfolios. In a dispute, they may present smaller firms with mountains of patents to analyze and defend against. For a small business with limited staff and budget, the legal costs alone can be overwhelming. The result is often a settlement: meaningful money for the small company, but almost negligible to the corporate giant.

When Small Companies Troll Big Ones

On the other hand, small companies—or sometimes dedicated non-practicing entities—can also flip the equation:

• The Cost of Defense: In the U.S., defending a patent lawsuit through trial can cost $3–5 million. Even if the larger company expects to win, the process takes years and consumes technical and management resources.

• The Settlement Option: A small company might offer a license or settlement for $200,000–500,000. From a purely economic perspective, many large firms will pay to avoid the prolonged fight.

• Asymmetry of Risk: If the large company countersues and wins, the smaller company may have little to lose—often no assets to cover millions in legal fees.

• The Uncertainty Factor: Patent validity is never guaranteed until tested in court. Even a vague or questionable claim carries a non-zero risk of success. If the large company loses, damages can reach hundreds of millions.

In practice, this creates a cost-benefit dilemma for big companies: spend millions to fight or pay a fraction to settle. The small company is effectively offering to sell “peace of mind” for a price that is lower than the legal war.

The Larger Lesson

What’s important to notice is that patent trolling is not confined to one side. Big players sometimes wield overwhelming portfolios; small players sometimes leverage broad or vague patents. The common thread is that both exploit the high cost, long timelines, and uncertainty of litigation.

As researchers and innovators, being aware of these dynamics helps us better understand the IP landscape we work in. Just as with restrictive clauses, it’s about recognizing the rules of the game and making informed choices.

If you search “patent trolls,” you’ll find plenty of examples, both large and small, that illustrate this pattern. 

I share this not to accuse, but to highlight a reality that many of us will encounter in different ways. I hope this gives you another perspective to keep in mind as you navigate your own path in research, industry, or entrepreneurship.

In Part 3, I’ll share another lesson I learned about navigating IP — this time focusing on licensing and negotiation strategies, where the stakes can be just as high but the dynamics are very different.