Patents and Patent Trolls and Extortion

This American Life "When Patent Attacks" (from July 2011)
The United States Patent and Trademark Office   (for general information)
Apple makes a deal with the devil - or worse, a patent troll (for an example from today's news)

Patent Trolls are the new shakedown bullies on Main Street.
They are essentially 'shell' companies that buy up technology patents and then sue other people for infringing on the patents.

First, as I understand, the patent office is having trouble administering all the patents; there are duplicates, and some patents don't have enough specificity to be unique.
That's a problem right there.

It all starts with a person who invents something that is revolutionary and unique.
Then a big company gets wind of it and essentially steals the invention out from under the person.
(Read this New Yorker article by John Seabrook about Robert Kearns and intermittent windshield wipers, or watch the movie "Flash of Genius" starring Greg Kinnear)

We need a system of laws to protect individual entrepreneurs and inventors from being bullied by large companies with unlimited resources.

Fine and dandy.

Now, consider the pace of technological advancement today.  Fast.

The patent office is creating new patents for items that are essentially the same, but with minor differences.  Item A uses 97% compound X and is patent number 423
Item B uses 98% compound X and is patent number 424.
It's a bureaucratic nightmare.

In come the sharks...rich people use the very mechanism put into place to protect the 'little guy' to shakedown every Tom, Dick, and Harry who breathes on a patent they own.
They buy up all the patents they can and make their money suing other companies - big and small - for the least little appearance of patent infringement.

Not only that, but part of the practice is to threaten companies with years of court battles and encourage them to pay money to avoid a lawsuit.

Isn't that strikingly like the protection rackets we used to hear about (and maybe are still in practice)?
Gangs in a territory would sell 'protection' to the retailers, but if they don't buy the 'protection' then suddenly their store is robbed or vandalized.

Listen to the This American Life story linked above.  It's crazy what's going on.