Tim Lee has another excellent post on the state of the patent system these days, taking on the claim by Michael Mace that software patents are good
because it stops big companies from competing with him, by questioning whether or not there's a reasonable policy rationale for this. Lee's point is that it's not at all clear that letting the "first" own the market makes much sense
Companies have other ways to protect their innovations. They can use copyrights, trade secrets, and the head start that any inventor has over copycats. Mace objects that these protections aren't adequate to guarantee that the original inventor will win in the marketplace. But that's the point: consumers benefit from the robust competition that results when inventors have only a limited advantage over competitors. The first company to enter some market shouldn't be able to simply rest on its laurels. Remember, Facebook was a "me-too competitor" in the social networking space; it's a good thing that Friendster and MySpace weren't able to stop Mark Zuckerberg from entering its market.
The function of the patent system isn't to maximize the profits of inventors. Rather, it's to provide inventors with sufficient incentives to ensure they continue innovating.
This is a big point that is all too often ignored in these debates. People seem to think that the entire purpose of the patent system is to maximize the benefit of whoever got their first. But that's simply not the case, and any argument based on that is faulty.