The patent system is broken. The patent office accepts virtually every submission and lets the courts decide what to do about it.

There are lots of ideas on how to fix the system. A couple of big tech companies recently testified about the patent trolling problem. Wikipedia, as always, has a good description of patent trolling:

'Patent troll' is a derogatory term used to describe a patent owner, frequently a small company, who attempts, under the threat of litigation, to license the patents which it never had intended on practicing. Typically, a patent troll seeks royalties or other payments at rates higher than would otherwise be expected, but calculated to be less than the cost of litigation. A patent troll neither performs research nor manufactures products incorporating its patented technology. Furthermore, a patent troll normally has few assets other than the patents and normally conducts no business besides litigation.

Amazon thinks the solution is to reform the legal process around infringement suits. As reported by CNET:

Paul Misener, Amazon.com's vice president of global public policy, urged the politicians to concentrate primarily on rewriting the law surrounding the damage awards process. One suggestion made by Amazon and other technology companies, whose products often rely on as many as hundreds of thousands of distinct patented components, involves requiring juries to award money to patent holders based solely on the infringed patent's contribution to the overall product, not on lost sales for the entire affected product.

That's great for a big company like Amazon, but would allow smaller companies with valid and utilized patents to be run right over.

ITman himself, Dean Kamen had a different approach:

But Dean Kamen, a New Hampshire-based independent inventor perhaps best known for inventing the Segway Human Transporter, cautioned politicians not to erode, in their quest to root out "bad actors," the rights of legitimate innovators who thrive on licensing their patents to larger companies.

"If a big company repeatedly disregards people's rights, they are as bad as the trolls at the other end," Kamen said. He suggested that a way to quell abuses by both sides could be to institute "some form of loser-pays" approach to "penalize people who are abusing the system."

But most surprisingly, the best idea came from Congress.

Both bills, for instance, would establish a "post-grant opposition system" in which the public would have a certain number of months to dispute the validity of patents after they are issued without having to go to court.

This is the sort of reform that's needed. The solution isn't to limit damages or recalculate how damages are awarded. The solution is to stop granting so many patents in the first place. Trolls exist because too many patents are awarded and it's too expensive to challenge them. Amazon and others like having patents given out like candy because they can afford to defend them. With their proposal, there is no incentive to respect a patent. Don't want to license something? Don't worry! Just use it and sleep well at night knowing that the amount you could lose in court is capped.