I heard that somewhere, else, not our own phrase. But what we're talking about are companies who don't do the research and devleopment but simply find ways of filing for patents that they speculate may be useful.
Large corporations who do legitimate research are sometimes guilty of patent squatting. They patent a generalized process that they haven't developed, wait for someone to actually implement it, then try to make money on the license.
I have no problem with patents when they are used correctly which is the scenario you described. Someone does research, develops a real technology then licenses it out for production. What I have an issue is companies who do nothing but develop patents, not real technologies and processes.
See this article for more
And here's a great resource for turning up examples of bad patents
Why do you think it's bad for ''the little guy'' to develop technology and then want his/her fair cut when a large company uses it? You've even come up with a cute, yet derrogatory name for it, ''patent-squatting.'' I'm not completely familiar with the technology industry, but I am familiar with the biotech industry. There are MANY small biotech companies that exist solely to develop new technologies and sell them to larger companies. It's kind of like outsourcing your R&D department. It's patent law that keeps the big companies from just taking the tech and cutting the little companies out completely.
Your response will likely be that we just need some reform, but I'm not sure I've seen a legitimate case of ''squatting'' where the patent holder has not invested money and time developing the technology. Just because it affects your precious Prius or Crackberry doesn't make Toyota or RIM in the right. They should have paid for the technology up front, or made their own.
PS. Love the show.