Patents exist for very specific situations, of which none of the obvious "patent troll" patents fulfill.
Firstly they exist for technologies which could be made secret, but would benefit society more if they were made open. That's why patents are supposed to expire after several years; so the inventor can make some good money, but then it's opened up to everyone else to build upon. The classic example is the cotton gin; without it the cotton is worthless until a lot of labor has gone into hand-picking through it. Even early 19th century slave labor cost more (in food and..."management" costs) than purchasing and using such a machine. But if the inventor didn't get a monopoly on selling the devices, there would be cheap knock-offs almost immediately. Therefore the most profitable option is to form a guild of cotton gin operators to keep the device a secret and charge a premium for its use.
Note that this does not apply to something like a cell phone; even if you formed a guild of cell phone operators, it would be far too expensive to have them around and they wouldn't sell enough to be profitable. It would, however, apply to something like a printer, and without patents then future advancements in printing technology could conceivably be sold only to printing shops (Kinko's et al) with exclusive and confidential contracts. One can imagine a world where, without patents, the Xerox machine never made it into the office. Where would we be if paper copies were still possible, but three times as expensive? In this case, maybe it's a better world...but think of the poor paper companies!
Secondly patents exist for technologies which would be nearly impossible to keep secret, but which cost huge amounts to develop in the first place. The poster child for this is pharmaceuticals. There is no free market profit incentive for developing new medications if Wal-Mart could produce generics on day one. None of the R&D costs would ever be recovered and we wouldn't get hardly any new drugs. Most of the R&D cost is sunk into FDA testing, however, and this particular case could probably be handled by the FDA granting pharmaceutical patents directly.
But what about, say, CPU technology? With the right equipment I could buy a top-of-the-line Intel processor, dissolve away the non-operative parts, and examine the silicon wafer directly. Then I could make copies and sell them. Do you think it really costs $600 to produce the top mobile i7 CPU? Certainly not; much of that cost is going towards their R&D which produces new designs every couple of years. Sure, the concept of a multi-core processor, or the concept of turbo boost, or any other concept in those units shouldn't be patentable. But the exact way they made it work? What if Apple, or Dell, or Lenovo, or whoever else took those designs, manufactured their own copies (possibly with a cheap third party chip manufacturer like TSMC) and cut out Intel entirely? Well, the argument is that Intel would never have been able to design those chips in the first place.
And what if there were no patent or copyright protections at all? Perhaps instead of selling the physical CPU to consumers, they would sell processing minutes instead. Would the PC revolution have took off without patent protection? Or would all of the advances in microprocessors have stayed in the mainframe? I'd like to think we'd still have PCs, and maybe the market would have been forced to respect our computing freedoms, but hope might not make it so.
