There are also the large copyists who rip off innovative startups. See http://qz.com/250346/a-google-... Innovative startups, particularly in the life sciences but also in other industries that require large and long-term investments, need patents. Google doesn't need them, and it's working hard to crush the system. So what happens if Google succeeds? We'd still have government and non-profit (e.g. open source) innovation. Private innovation would still happen in fast-moving fields with first-mover advantages, in fields where trade secrets are effective, and in large enterprises that recoup innovation costs in other areas (Google now, or Bell Labs in the past). That leaves large swathes of technology where innovation by startups goes away because no investor would have any hope of making money. See China's hyper-competitive ripoff culture for a hint of what that would look like.

I recall MSFT allowed the Chinese government to look at Windows source code a few years back. I wonder if the vulnerable IE6/7/8 code was part of the code provided to the Chinese government, but IE5.4 (not vulnerable to the latest attack, apparently) didn't include the problem code? This is something that can be checked. It could be an indication of whether the Chinese used the source code inspection as a road map to identify vulnerabilities for attacks like these.