This lawsuit is a bit much (and I mean, he's basically patented "using the internet" on there. It would have been difficult to see that at the time, but in hindsight..). There does need to be an overhaul of the patent system, as it was made to deal with sprockets and widgits, not with genetic code (patenting a human gene is pretty absurd) nor with computer code. If a firm invests millions of dollars in a novel implementation of something that's one thing, but patenting "Alerting Users to Items of Current Interest"? Come on.
The hatred of lawyers is one thing, but on the other hand, for every startup destroyed by a patent case there is another that can only exist because it patents a novel way to do something and thus muscles its way into a marketplace because it can produce a superior product. The Venture Capitalist system of funding startup after startup and feeding them to the larger companies in buyouts does foster innovation, because it moves the risk from the companies to the capitalists, who invest more, allowing for larger R&D gains in less time.